Iliad tipped to stick with 2.6GHz spectrum

French operator Iliad is likely to make only a token bid for 800GHz spectrum in the second round of the country’s 4G license auction, Fitch Ratings predicts.
The ratings firm reasons that the 20MHz of 2.6GHz spectrum Iliad won in the first round of the auction – which closed last week – will be enough for the firm to cover the urban areas where it is currently investing in its own network. Remaining parts of France will most likely be covered by roaming deals, making it unnecessary for the operator to win any spectrum in the 800MHz sale.
Iliad and France Telecom won 20MHz of 2.6GHz spectrum in the first round, with SFR and Bouygues Telecom netting 15MHz apiece. The auction raised €936 million – about 33% over the reserve price. The 800MHz sale is due to begin in December, and carries a reserve price of €1.8 billion.
However, there is now no regulatory requirement for Iliad to win any blocks in the latter auction, which Fitch notes suits its commitment to minimal capex. The ratings agency says the low outlay approach is essential to boost the firm’s chances as a late entrant to the highly-competitive French market.