3G bids move higher on day two

The second day of the auction of 3G spectrum saw greater interest from bidders with the pan-India licence reaching a bid of Rs 4,085.23 crore, 16.72 per cent higher than the base price of Rs 3,500 crore. The first day of 3G auction had seen the price go up to Rs 3,913 crore.

Six telecom service providers (Bharti Airtel, Vodafone Essar, Reliance Communications, Idea Cellular, Tata Teleservices and Aircel) are vying with each other to get 3G spectrum in all the 22 circles. A total of 10 rounds have been completed in two days.

Gujarat attracted the maximum number of bidders at 5, followed by Delhi and Andhra Pradesh with 4 bidders each. Delhi continued to attract the most aggressive bids. The bid price hit Rs 392.31 crore on the second day, which is 22.59 per cent higher than the base price of Rs 320 crore. In Andhra Pradesh, the bid went up to Rs 381.13 crore, 19.1 per cent higher than the base of Rs 320 crore. The bid in Gujarat touched Rs 377.36 crore, 17.92 per cent higher than the base of Rs 320 crore.

In Category C circles, the demand for 3G spectrum did not pick on the second day also. Orissa, Assam and Jammu & Kashmir circles saw no bidders today. Orissa and Assam have three slots for 3G auction, while Jammu & Kashmir has 4 slots available.

According to the rules of the auction, the prices could go up 1 to 10 per cent with every round. But the maximum increase was 15-17 per cent in the beginning of the auction, which reflects conservative bidding, according to some analysts. However, some analysts said they were confident the prices will increase significantly as the process moves forward. The 3G auction process is expected to go for one or two weeks.

The government has said that it expects to earn Rs 35,000 to 45,000 crore from 3G and broadband wireless auctions. State-owned Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd were given 3G spectrum ahead of private players and have already launched their 3G mobile services.