Spectrum auction nets Rs 14k cr as deposits

Seven telecom operators have deposited Rs 14,653 crore as earnest money for the largest spectrum auction from October 1.

The department of telecommunications (DoT) on Monday said Reliance Jio, Bharti Airtel, Idea Cellular and Vodafone can bid in any spectrum band in any of the telecom circles in the country. There are 22 telecom circles in India. The maximum earnest money deposit (EMD) of Rs 6,500 crore was submitted by Jio.

Vodafone India has submitted EMD of Rs 2,740 crore, followed by Idea Cellular's Rs 2,000 crore and Bharti Airtel's Rs 1,980 crore. While they can bid in any circle, they may not be able to bid for the 700-MHz band. EMD indicates a companies' strategy to bid in specific circles and spectrum bands. It gives them eligibility points with regard to circles and bands.

Tata Teleservices has submitted an EMD of Rs 1,000 crore, Reliance Communications Rs 313 crore and Aircel Rs 120 crore. For Tata Teleservices, the net worth of promoters has been taken into consideration for bidding on behalf Tata Teleservices Maharashtra (in Mumbai and Maharashtra). It can bid for all bands in Mumbai and Maharashtra circles.

For the 800-MHz band, it cannot bid in Assam and North East, for 900 MHz and 1,800 MHz, it cannot bid in Assam, Delhi and North East. Reliance Communications can bid in any service area, except Assam and North East. Aircel can't bid in any circle in 700-MHz, 800-MHz and 2,500-MHz bands. For the remaining bands, it can bid in select circles.

According to telcos' submissions with DoT, Bharti Airtel has maximum net worth of Rs 66,643.20 crore, followed by Reliance Jio's Rs 45,042.69 crore, Idea Cellular's Rs 24,935.84 crore, Vodafone India's Rs 23,040 crore and Reliance Communi-cations' Rs 12,639 crore. Aircel and Tata Teleservices have a negative net worth of Rs 10,506.13 crore and Rs 9,482.15 crore respectively.

The government has put up 2,354.55 MHz of spectrum for auction, which at its reserve price is valued at Rs 5.66 lakh crore. Industry sources say spectrum worth around Rs 80,000 crore is likely to be sold in the upcoming auction.

The latest auction is important as the government is putting up large chunks of spectrum for sale, which should help in removing fragmentation and improve service quality. Also, the rules have been made bidder-friendly. The government expects revenue of Rs 98,995 crore from communication services in 2016-17, which includes proceeds from spectrum auction and other fees levied by DoT.