Spectrum auction: Govt revenues cross Rs 1.08 lakh cr on Day 13

Auction will continue on Thursday, according to a statement by the DoT

The government’s assured revenue from telecom spectrum auction crossed Rs 1,08,000 crore at the end of the 13th day of bidding on Wednesday, marginally higher from the previous day. The auction will continue on Thursday, according to a statement by the Department of Telecommunications (DoT).

The auction, the biggest so far, began on March 4. The government is auctioning 380.75 MHz of spectrum in the 800, 900 and 1,800-MHz bands, and 5 MHz in the 2,100-MHz band, across 17 of the country’s 22 circles. The department of telecommunications had initially estimated it would get Rs 80,000-100,000 crore.

"Brisk bidding was seen on 13th day of bidding, with activity requirement set at 100 per cent. There is robust bidding going on in 1800MHz and 800MHz bands. At the end of 80th round, about 89 per cent of the spectrum has been provisionally allocated to bidders. The provisional amount committed by bidders at the end of 80th round is over Rs 1,08,000 crore. Majority of service areas are going at a premium over reserve price. The competitive bidding is expected to continue," DoT said in a statement on Wednesday.

However, the final results will not be published by the DoT as the Supreme Court has barred the DoT to do so without its permission. A hearing in the apex court in this regard is scheduled for March 26.

Considering the current bidding trend, analysts expect the auction to continue for a few more days.

Many of the telecom operators are bidding fiercely to regain their existing spectrum holding as 29 licences of different operators are coming up for renewal in 2015-16. The licences of Idea Cellular (nine circles), Bharti Airtel (six circles) and Vodafone and Reliance Telecom (seven circles each) are due for renewal in 2015-16, which has made ongoing spectrum auction crucial for them. Overall, 29 licences in 18 service areas are due for renewal in 2015-16. These licences hold 184MHz of spectrum in the 900MHz band and 34.2MHz in the 1,800MHz band. Seven circles -- Bihar, HP, UP west, Gujarat, Odisha and Kerala -- which are must wins for some telcos, has seen prices going up by over 100 per cent.

In a recent note, equity research firm Morgan Stanley had predicted that the current auctions could settle at Rs 1,18,500 crore. "Operators would need a hike in tariffs of 5 paise or 15 per cent to neutralise its impact on profits. The spectrum is valid for 20 years and hence, there is a lot more certainty from a business continuity perspective. Data growth is happening at a robust pace, which should aid overall revenue growth for the operators," it noted.