Monday, June 21, 2010

Germany auctions 4G

After the fill-up of coffers, thanks to 3G & WBA auctions in India which would reduce the fiscal deficit from 5.5 to 5% , we'll have private players fighting for a new &interesting tariff war from next year beginning, in the meantime, Germany has recently auctioned its 4G spectrum in 224 rounds of bidding for over 6 weeks and become the 1st European country to do so.

Although the auction's total revenue of nearly 4.4 billion euros was a welcome windfall for German state coffers, it fell far short of the 50 billion euros generated from the sale of 3G frequencies in 2000. (Remember , India fetch  $15.4 Bn from 3G auctions )

It is interesting to see here that ,close to DSL speed auctioning (3G), fetched 12 times a decade ago. This can be attributed to factors, most importantly, to the technology neutral market in mobile communications in developed countries in Europe .
Also, the revenue on investment isn't as alluring as it was a decade ago, infact only 4 existing operators purchased the spectrum with Vodafone spent 1.42 Bn Euros,Telefonica's O2 1.38 billion euros, Deutsche Telekom 1.3 billion euros and Royal KPN's E-Plus 283.6 million euros.
Also, newer regulations such as operators must first build networks that cover 90 percent of the population in villages with a population of not more than 5,000 inhabitants.

Its interesting to see how events get unfolded in India in the next decade.

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