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Telecom spectrum auction application process ends today

Sistema will have to bid to continue operations, incumbent operators expected to look for extra spectrum, new bidders unlikely

Sounak Mitra  |  New Delhi 

operators willing to bid for acquiring fresh spectrum in 1800 MHz and 800 MHz bands will have to submit their final application by end of today.

In this current round of auction, the Government has decided to sell airwaves in Delhi, Mumbai, Karnataka and Rajasthan for 1800 MHz band, and pan India for the 800 MHz band.

The Government has also announced that it will put on block the unsold spectrum in the 1800 MHz band for auction, immediately after the current round, which starts on March 11, gets over in order to comply with a Supreme Court order.

The Government had also planned to conduct auction of 900 MHz spectrum simultaneously with the 1800 MHz band. But, it will not be able to finalise the auction for the 900 MHz band as incumbent operators have moved to the Delhi High Court after they failed to get a response from the Department of Telecommunications on their plea for renewal of licences for the 900 MHz spectrum band which they had bought in November 1994. The Centre, meanwhile, has informed the Delhi High Court that it will take a final call on the renewal of 900 MHz spectrum in two weeks.

The Government had planned to auction airwaves in Delhi, Mumbai and Kolkata for 900 MHz band.

Sistema Shyam Teleservices, which has lost permits in 21 zones, will have to bid for the auction to continue operations in India. The company has already expressed intention to bid for the auction. However, it is assumed that the Russian telco will bid for the remaining 11 circles in the 800 MHz band. Following the Supreme Court order early this month, the company has stopped operations in 10 zones.

Auction of 1800 MHz band
Service area Overall cal for each operator Reserve Price (In Rs Crore) Spectrum put to auction
Delhi 19.00 MHz 485.15 15 MHz
Karnataka 18.60 MHz 231.08 10 MHz
Mumbai 24.00 MHz 474.92 15 MHz
Rajasthan 18.80 MHz 46.96 10 Mhz

According to industry insiders, incumbent operators like Bharti Airtel and Vodafone are likely to bid for Delhi and Mumbai to secure more spectrum in these high density zones. But, the Government may not receive interests from new players for these circles. Telenor, which had earlier said that it intended to participate in the March auction for Mumbai circle, has closed down operations in Mumbai circle.

The Government has decided to auction 50 MHz of airwave in the 1800 MHz band, 42.5 MHz in the 900 MHz band and 76.25 MHz of spectrum in the 800 MHz band. (See chart for details)

The government had reduced the base prices for Delhi, Mumbai, Karnataka and Rajasthan for the March auction as these zones failed to attract any bidder due to high reserve price.

Auction of 900 MHz band
Service area Overall cal for each operator Reserve Price (In Rs Crore) Spectrum put to auction
Delhi 10.60 Mhz 970.3 15 MHz
Mumbai 10.60 Mhz 949.84 15MHz
Kolkata 9.35 MHz 227.44 12.5 MHz

In the 1800 MHz band, 15 MHz of spectrum would be put for auction for in Delhi and Mumbai each at base prices of Rs 485.15 crore and Rs 474.92 crore a block, respectively. In November, the government had offered only 10 MHz of the radiowaves in these circles, at reserve prices of Rs 693.06 crore and Rs 678.45 crore, respectively. The November auction fetched the government exchequer just Rs 9,407 crore, as against the government expectations of around Rs 28,000 crore, on account of high reserve prices. Though the government had auctioned 176 blocks (1.25 MHz each) of the 198 blocks in the November auction, it managed to get bidders for only 101 blocks.

The Government also has 97 blocks of 1.25 MHz spectrum each, which can put on the block in the third round. The 121.25 MHz of spectrum that would be auctioned in the third round would have a base price of Rs 9,755.73 crore, based on the market-determined price discovered in the November auction.

Cap on bidding for each operator for each service area in 800 MHz band
Service area Maximum cap for each operator Reserve price per block of 1.25 MHz (In Rs Crore) Spectrum put to auction
Andhra Pradesh 7.50 MHz 186.49 2.50 MHz
Assam 4.38 MHz 5.63 3.75 MHz
Bihar 7.50 MHz 27.63 3.75 MHz
Delhi 8.75 MHz 450.49 3.75 MHz
Gujarat 6.88 MHz 146.15 3.75 MHz
Haryana 7.50 MHz 30.24 3.75 MHz
Himachal Pradesh 5.63 MHz 5.06 3.75 MHz
Jammu Kashmir 4.38 MHz 4.11 3.75 Mhz
Karnataka 7.50 MHz 214.58 3.75 MHz
Kerala 8.13 MHz 42.45 3.75 Mhz
Kolkata 7.50 Mhz 73.92 3.75 MHz
Madhya Pradesh 6.88 MHz 35.09 3.75 MHz
Maharashtra 8.13 MHz 170.83 3.75 MHz
Mumbai 8.13 MHz 441 3.75 MHz
North East 4.38 MHz 5.75 3.75 MHz
Orissa 6.25 MHz 13.18 3.75 MHz
Punjab 7.50 MHz 43.73 2.50 MHz
Tamil Nadu 6.88 MHz 198.96 3.75 MHz
Uttar Pradesh (East) 7.50 MHz 49.51 3.75 MHz
Uttar Pradesh (West) 7.50 Mhz 69.82 3.75 Mhz
West Bengal 6.25 MHz 16.79 3.75 Mhz