Will recover spectrum bid amount in two years: Idea

The operator will be able to expand its 3G network in Delhi and also launch 4G services

Idea Cellular, which spent as much as Rs 10,400 crore to win spectrum in nine circles, today said that it will recover its bid price within two years, in pre-tax profits.

“This is based on the current earnings before interest tax depreciation and amortisation (EBITDA) trends of the nine strategic markets. After the initial payment of approximately Rs 3,100 crore, the balance amount will be paid in ten equal instalments after the first two year moratorium including interest at 10%,” said Idea, in a press release.
 
The spectrum, Idea says, will get the necessary impetus to expand its 3G network in Delhi where it won 900 Mhz. The operator also said that it will be able to launch 4G services in eight of its key revenue markets, going ahead.

“With Delhi win, we can extend its 3G services to 12 circles covering nearly 79% of gross revenues,” the company said. It also acquired additional top up spectrum in 1800 MHz in Mumbai, Madhya Pradesh & Chhattisgarh, Maharashtra, ,Punjab, Gujarat, Andhra Pradesh, Haryana and Delhi.

“With this additional spectrum auction win, Idea’s six strategic markets of Kerala, Andhra Pradesh, Maharashtra and Goa, Madhya Pradesh and Chhattisgarh, Punjab, and Haryana, representing 53% of revenues, will seamlessly experience all three technologies of GSM, 3G, and 4G services,” the company said.

The stock went up by 0.5% today and was trading at Rs 132 at 1:44 PM.