Vodafone pips Jio in spectrum auction

Spectrum auction continued for the fourth day, with about Rs 2,500 crore being added to the government’s kitty, as the value of bids reached Rs 63,500 crore at the end of 23 rounds on Wednesday.

UK-headquartered telco Vodafone has committed bids worth Rs 17,500 crore, the highest in the auction till now, industry sources said. Reliance Jio is learnt to be next in the pecking order, with bid value of Rs 16,500 crore, followed by Idea Cellular at Rs 15,500 crore, Bharti Airtel Rs 13,500 crore and Tata Teleservices Rs 7,000 crore. Sources also said Tata Teleservices has committed Rs 550 crore in Mumbai alone to retain spectrum in the 1,800-megahertz, as its licence is coming up for renewal.      Turn to Page 8 >

The telecom operators though maintained their indifference towards the coveted 700 Mhz and 900 Mhz bands.

Of the 2,354.55-Mhz up for auction, 956 Mhz has been sold.

The bidding activity has been curtailed to just a few circles now, with Mumbai and Uttar Pradesh (UP) East witnessing action in the 1,800-Mhz band. According to sources, Tata Teleservices and Idea Cellular are fighting out in Mumbai for a five Mhz slot in the 1,800 Mhz band.
    

In UP East, Reliance Jio, Vodafone and Airtel are slugging it out. Also Gujarat and Rajasthan in 800 MHz drew telcos interest with Rajasthan seeing excess demand at the end of 23 rounds, with price increment going forward in round 24.

Signalling that auctions may be close to completion, the duration of rounds has been reduced to 45 minutes from one hour from Thursday.

Seven telecom companies – Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio, Aircel, Reliance Communications and Tata Teleservices – are in the fray for acquiring 3G and 4G airwaves.

At the end of 17 rounds on Day 3, the value of bids had stood at Rs 60,969 crore.

According to a Credit Lyonnais Securities Asia (CLSA) report, spectrum bids were mainly aimed at boosting 4G airwaves with entire spectrum in 2,300 Mhz, 74 per cent in 1,800 Mhz and 57 per cent in 2,500 Mhz band being sold.

Operators also bid for 2100 Mhz in select circles mainly for low data penetration markets (B and C circles). The CLSA report added that while there was sharp price increment in few circles, overall price rise was limited due to ample spectrum availability across bands.

Industry has been cautious in this auction and companies are going for low-priced spectrum that will help them in improving mobile service quality.

According to rating agency Icra, the consolidated debt level of the industry stood at Rs 3.8 lakh crore in December 2015, against Rs 2.9 lakh crore in March 2014.

In the Budget, the finance ministry had put the revenue target from the telecom space at Rs 98,995 crore, of which Rs 64,000 crore was to come from auction. The premium 700 Mhz band alone has the potential to fetch bids worth Rs 4 lakh crore, if the entire spectrum in this band is sold at the base price.