Telco might tone down spectrum bid

Company has asked for reduction in bank guarantees from 3,700 crre to 2975 crore

Bharti Airtel on Tuesday approached the department of  telecommunications (DoT) with a request to reduce the bank guarantees it had given for the spectrum auction that is to begin on Monday. It had given the highest amount in bank guarantees, of Rs 3,700 crore.

It sought the reduction on the final day for withdrawing applications.”We are approaching DoT to check if we could make our total earnest money deposit Rs 2,975.25 crore instead of Rs 3,700.25 crore,” director for legal & regulatory affairs, Jyoti Pawar, wrote to M F Farooqui, DoT secretary.

Vodafone submitted Rs 2,800 crore in bank guarantees, Reliance Jio Infocomm Rs 2,596.25 crore, Idea Cellular Rs 1,567.5 crore, Telewings (Uninor) Rs 330 crore, Tata Teleservices Rs 267 crore, Reliance Communications Rs 198.75 crore and Aircel Rs 100 crore.
 

The Empowered Group of Ministers (EGoM) on telecom, headed by Finance Minister P Chidambaram, on Monday decided to levy annual spectrum usage charge (SUC) on new airwaves for mobile services at five per cent of their adjusted gross revenue (AGR) earned from telecom services.

Bharti Airtel’s licences in Delhi and Kolkata, where it holds the premium 900 MHz spectrum, are expiring in November, and it will have to bid aggressively to retain its current holding of airwaves in the circles.

Even after lowering of EMD, Airtel would have the highest points, enabling it to bid for the maximum quantity of spectrum in the auction.

According to a statement by the DoT, Vodafone India will not be able to bid for seven circles – Assam, Bihar, Himachal Pradesh, Jammu and Kashmir, Madhya Pradesh, North East and Orissa, in the auction of spectrum. Tata Teleservices will not be permitted to bid for Delhi circle, while Reliance Communications (RCom) will not be able to bid for eight circles – Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, North East, Orissa and West Bengal.

Bharti Airtel, Aircel, Idea Cellular, Reliance Jio Infocomm and Telewings Communications are eligible to bid for 22 circles across the country, according to the list of pre-qualified bidders published by the DoT.

For the scarce 900MHz band, companies are required to deposit Rs 438.75 crore as minimum earnest money if they want to bid for 5MHz spectrum each in all three metros — Delhi, Mumbai and Kolkata. For the 900 MHz band in Delhi and Mumbai, the two major metros, companies are required to provide a bank guarantee of Rs 172.5 crore each.