KUCHING: Axiata Group Bhd (Axiata) is in the bidding for bandwidth for 3G mobile services covering the whole of India after 22 rounds of auctioning which currently places the value at INR45.82 billion or US$1.03 billion.According to a research report released by ECM Libra Capital Sdn Bhd (ECM Libra), the bidding for the one available pan-India slot started at a value of INR46.21 billion.
Slots covering individual state service areas, it added, had also been auctioned by the government with Delhi remaining as one of the most sought-after service areas attracting the highest price of INR4.38 billion.
The Indian government was auctioning three bandwidth slots for 3G services in 17 telecom service areas and four each in the remaining five areas, noted ECM Libra.
Successful bidders would be able to offer 3G services on a commercial basis starting from Sept 1 2010 onwards.
The auction saw nine local mobile phone operators including Idea Cellular Ltd (Idea Cellular), an associate of Axiata bidding for 3G bandwidth.
The research report continued to assume that should the auction bidding process intensify, Axiata might find its share of the bidding cost to escalate despite only owning 19 per cent equity stake in Idea Cellular.
Axiata would also need to fork out a minimum US$190 million if Idea Cellular was serious about rolling out pan-India 3G mobile services, it added. ECM Libra concluded that this explained Axiata’s recent proposal to raise its debt to US$300 million.
The research house retained its fair valuations for all stocks under coverage with earnings growth likely to be tepid going forward as the mobile market was increasingly becoming saturated.
ECM Libra maintained Maxis’s target price at RM5.90 per share, Axiata at RM4.15 per share, DiGi at RM23.20 per share and TM at RM3.54 per share.