RIL-Bharti: Stage Set For Round 2

The forthcoming 700 MHz auction is going to be an interesting one to say the least. It will add another chapter in the war for supremacy between Bharti Airtel Ltd. and Reliance Industries Ltd. (RIL). (See Game Changing Opportunity For RIL?, IndiaWatch: RIL Preps BWA Launch and IndiaWatch: India Inches Closer to 700 MHz Auction.)

The auction provides an opportunity to Bharti to procure all-India spectrum for 4G services. Bharti has Broadband Wireless Access (BWA) spectrum in only four circles while Reliance is the only operator to have a pan-India BWA spectrum. There is, however, a possibility that Reliance executes another stunt and bids in this auction as well. This, of course, will ensure that the government gets a good return on the 700 MHz auction. (See Rumor: RIL Strikes LTE Rollout Deal.)

It is a known fact that operators vie for the 700-MHz spectrum because it will allow networks to be built at one-third the cost of 2.3 GHz broadband wireless band. On the flip side, 700 MHz has low data capacity, implying that it will be very efficient in rural areas but not in urban areas.

This means that even if Bharti does get the 700-MHz spectrum, it will be handicapped in urban cities and its services will not appeal to the urban users. The second issue is that Bharti will be hoping that auctions are conducted before the launch of BWA services of Reliance Industries.

Either way, the battle will be worth watching with its twists and turns. Exciting times ahead!

Gagandeep Kaur, Editor, Light Reading India