Spectrum auction: Day 1 sees bids of Rs.53,000 crore after five rounds

India's biggest telecom spectrum auction, that started on Saturday, received commitments of Rs 53,000 crore approximately from telecom operators after five rounds of bidding while there were no takers for 700 MHz and 900 MHz bands, according to data by the Department of Telecommunications.

The majority of activities were seen in the 1800 MHz band. The maximum bids of 75 were received for Mumbai circle with a provisional winning amount of Rs.69.6 crore per block with an excess of 50 bids, while the second highest bids - 69 - were received for Assam circle with a provisional winning amount of Rs.8 crore per block. However, this circle also saw 30 less bids.

The companies participating in the auction are Bharti Airtel, Vodafone India, Reliance Jio Infocomm, Reliance Communications, Idea Cellular, Aircel and Tata Tele -- who have together furnished a total earnest money of Rs 14,653 crore.

Surprisingly, the 700 MHz band, meant predominantly for 4G (LTE) services which will support broadband data, as well as Internet Protocol telephony such as voice over LTE network -- measures that can bring major cost benefits to customers -- went without bids.

In the Delhi circle, the reserve price for 700 MHz is pegged at Rs 1,595 crore per MHz -- which is the highest -- and for pan-India, it is Rs 11,485 crore per MHz.

The 2,300-plus MHz of airwaves on the block for telecom operators are in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. In the previous auction, 470.75 MHz was on offer, which was set to fetch the exchequer $17 billion during the tenure of licence.

The auction now is central to the government realising the revenue target of Rs 98,994.93 crore that has been provided for in the budget against 'other communications services' -- the bulk of which is scheduled from the fee paid for spectrum.

The auction timings are from 9 a.m. to 7.30 p.m., Monday to Saturday.

For the auctions -- which will be an Internet-based, online process -- the government has hired the services of mjunction services.

The government has decided to allot the right to the spectrum won through auction for 20 years.

The operators will have the choice of both upfront and instalments payment options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25 per cent upfront, and for those winning above that, the upfront payment will be 50 per cent.

For the successful bidder, the lock-in period of equity in the company has been reduced to one year instead of the earlier stipulation of a minimum period of three years or completion of roll out obligation, whichever is later.

--IANS

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