We expect telcos to bid conservatively in the 2016 auctions considering: no renewals for the top telcos; accelerated network rollout resulting in adequate capacity for the top players for at least the next two-three years....

We expect top telcos and JIO to fill coverage holes in 1800MHz and 2100MHz. At the current exorbitant prices, 700MHz is unlikely to be sold and we expect the government to realise <50% of its budgeted proceeds. (Reuters)

We expect telcos to bid conservatively in the 2016 auctions considering: no renewals for the top telcos; accelerated network rollout resulting in adequate capacity for the top players for at least the next two-three years; supply glut resulting in unsold spectrum that telcos can pick up at lower prices in future auctions; and other options such as spectrum sharing and trading.

We expect top telcos and JIO to fill coverage holes in 1800MHz and 2100MHz. At the current exorbitant prices, 700MHz is unlikely to be sold and we expect the government to realise <50% of its budgeted proceeds.

There could be downside to our current estimates of `150 billion/`80 billion for Bharti/Idea.

Spectrum supply for 2016 auctions is 70% of the current spectrum in use. Top telcos completed most of their 900MHz renewals in 2014 and 2015.

Idea management is of the view that in addition to the spectrum glut in auctions, consolidation and spectrum trading/sharing will also create spectrum-buying opportunities.

Hence, Idea would be circumspect in auctions. Bharti has the highest spectrum holdings among telcos and may only fill up gaps in its footprint.

Accelerated network rollout in 2HFY16 has resulted in traffic per BTS per day at 11GB for Bharti and Idea.