Spectrum auction: Telcos shift focus to 1,800-MHz band

Assam most sought-after circle with prices jumping 338.5%

With telecom companies shifting their focus completely to the 1,800-MHz band, the price and demand for 900-MHz band spectrum remained unchanged on Tuesday, the eighth day of the ongoing auction of spectrum.

Assam has emerged as the most sought-after telecom circle for spectrum in the 1,800-MHz band with prices jumping 338.5 per cent, compared with the base price the government had set for the auction. Prices rose in nine more circles — Delhi (66.2 per cent), Gujarat (66.2 per cent), Maharashtra (66.2 per cent), Uttar Pradesh-west (53.1 per cent), Mumbai (21.6 per cent), West Bengal (17.1 per cent), Bihar (16.4 per cent), Madhya Pradesh (13 per cent) and Uttar Pradesh-east (4.9 per cent).



At Tuesday’s provisional winning price, the government would make Rs 58,000 crore from the 1,800-MHz and the 900-MHz band. This is 53 per cent higher than the value of the entire spectrum being auctioned at reserve price (Rs 37,903 crore).

The government has already secured more than what it earned from the 3G auction in 2010 by selling 20 MHz of radiowave for Rs 50,968 crore. On the eighth day, excess demand was seen in only three circles — Assam, Delhi and Maharashtra — in the 1,800-MHz band.



According to the Budget target, the government hopes to earn Rs 11,343 crore from spectrum auction this year. As companies have the option to pay in instalments, they will have to pay 25 per cent of the total bid amount for the 900-MHz band and 33 per cent of the total bid amount in the 1,800-MHz band.

Based on Tuesday’s provisional winning price, the government will get more than Rs 17,200 crore for the current financial year from the ongoing spectrum auction.

The government would earn Rs 23,590 crore at the provisional winning price at the end of the eighth day of auction by selling just 46 MHz of spectrum in the 900-MHz band.



According to market analysts, the battle has shifted to the 1,800 MHz band as incumbent operators now have more clarity on how much spectrum they would get in the 900 MHz band.

Bharti Airtel and Vodafone will have to buy spectrum in the 1,800 MHz band in the circles where they already have 900 MHz band spectrum, if they fail to retain their existing holding. The entry of Reliance Jio and Idea Cellular have further pushed up prices.