Idea may spend over Rs 8,500 crore in upcoming auctions: Report

Spending likely to add data spectrum in the firm's key markets, The Economic Times reports

Signalling heavy capital expenditure during the upcoming auctions, telecom giant Idea Cellular is likely to spend a whopping $1.3 billion (Rs 8,627 crore) to add data spectrum in key markets, The Economic Times reported on Thursday. 

Analysts feel that the company will cherry-pick data spectrum in its leadership circles viz. Maharashtra, Kerala, Madhya Pradesh, and UP-West where it has seen a steep increase in incremental revenue market share (RMS), the publication reported. 

Interestingly, the news comes after Idea had pegged its capex guidance for financial year 2017 in the range of Rs 6,500-7,000 crore. 

"Idea may add more data capacity in four circles and we see a potential spend of $1.3 billion in the upcoming spectrum auction by the company," said HSBC analyst Rajiv Sharma in a note. 

Meanwhile, another telecom major, Bharti Airtel, may buy fourth generation (4G) airwaves selectively in the 700 MHz band. This band is cheaper than the 900 MHz spectrum. 

“Bharti Airtel may add 700 MHz spectrum in a few markets where it is either priced at par or lower to 900 MHz spectrum as it could help the company address indoor data coverage issues, especially where it cannot use 900 MHz airwaves for 3G deployments," brokerage HSBC said.

The base prices of 700 MHz spectrum in UP-East, UP-West and Bihar are set at Rs 459 crore, Rs 384 crore, and Rs 248 crore, respectively, well below the 900 MHz prices of Rs 776 crore, Rs 739 crore and Rs 444 crore, respectively.