BWA auction kicks off, bids surge 34%

The auction for broadband wireless access (BWA) spectrum sprang a surprise on the first day itself, with bids up by as much as 34 per cent over the base price, compared with an increase of 12 per cent on the opening day of auction for 3G airwaves.

The bids for a pan-India BWA licence reached Rs 2,353.18 crore, from a reserve price of Rs 1,750 crore. This would assure that the government would get minimum revenues of Rs 7,059.54 crore from the first day.

The BWA auction started after the 3G auction was closed last Wednesday, which yielded over Rs 67,700 crore for the government after 34 days of aggressive bidding. The government had targeted Rs 35,000 crore from the auction of both 3G and BWA spectrum.

“I expect the competition will be very high for BWA, as competitive as 3G. I am expecting Rs 15,000 crore from the BWA auction,” Communications and IT Minister A Raja said.

Five rounds were completed on the first day of BWA auction. Delhi and Mumbai circles saw an excess demand of six bidders each on the first day, with two slots available in each circle. The bids in Delhi and Mumbai stood at Rs 232.96 crore each, at a reserve price of Rs 160 crore. There was excess demand in 12 circles, while there was negative demand in eight circles.

BWA spectrum would enable Worldwide Interoperability for Microwave Access (WiMAX) services in laptops and desktops, which would allow consumers to access the Internet at a very high speed.

There will be competition between WiMAX and another BWA technology, Long Term Evolution Time Division Duplex (TD-LTE) promoting companies. US-based firm Qualcomm is promoting TD-LTE, to which the WiMAX forum of India has raised objections, saying that chipsets for this technology is still not available.

As many as 11 companies including Bharti Airtel, Reliance WiMax, Idea Cellular, Aircel, Qualcomm and Vodafone Essar are participating in the BWA auction.

It is a simultaneous online auction for two slots in each of the country’s 22 service areas. The government has already allocated BWA spectrum to state-owned Mahanagar Telephone Nigam Ltd and Bharat Sanchar Nigam Ltd in their respective service areas and both will have to match the winning bid price.