)
The government’s assured revenues from spectrum auction touched Rs 96,000 crore on Wednesday. On Tuesday, revenues had dipped to Rs 92,000 crore from an assured sum of Rs 94,000 crore earlier.
So far, 43 rounds of bidding have been completed in the auction, which started on March 4.
“The bidding is taking place in all bands (800 MHz, 900 MHz, 1800 MHz and 2,100 MHz). Brisk bidding was seen on seventh day with activity requirement set at 100 per cent. There is aggressive bidding going on in the 1,800 MHz, 900 MHz and 800 MHz bands. Currently, 84 per cent of the spectrum has been provisionally allocated to bidders at a value of about Rs 96,000 crore. Majority of service areas are going at a premium over reserve price. The competitive bidding is expected to continue. There is still spectrum, which is yet to be sold,” stated the department of telecommunications (DoT).
According to experts, the auction will get over this week. “We expect the auction to be over in a few days, maybe by weekend. Reliance Jio has not spoilt the party as it does not seem to have bid for 900 MHz spectrum. Instead, in most of the circles there have been three-four including telecom companies, which had to retain the spectrum and at least two whose licence has not expired but they were looking for top up spectrum,” said Rajan Mathews, director-general, Cellular Operators Association of India.
Research firm India Ratings & Research said, “Reliance Jio, which already has pan-India 4G spectrum, is targeting a pan-India 3G presence to diversify from the current data-only strategy, by acquiring a combination of 900-MHz and 2,100-MHz bands in the auction.”
This is bound to increase competition, especially in the scarce 900-MHz band where existing operators will fight it out to safeguard their existing operations, the firm said.
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 the ongoing spectrum auction crucial for them. Overall, 29 licences in 18 service areas are due for renewal in 2015-16. These licences hold 184 MHz of spectrum in the 900-MHz band and 34.2 MHz in the 1,800-MHz band.
Bihar, Himachal Pradesh, Uttar Pradesh west, Gujarat, Odisha and Kerala circles, which are must-wins for some telcos, have seen prices increase by 100 per cent.
According to Mathews, many of the ‘must-win circles’ don’t have enough spectrum for two players, making the competition intense. Also, the rule that new players should buy a minimum of five MHz, while existing players can buy only 0.6 MHz has upped the ante.
“We believe Reliance Jio is bidding in 800 MHz, where there is not much contiguous spectrum available, but they could tie up with an existing operator who already has spectrum in this band. They could use this band to offer LTE (long-term evolution) 4G services,” he said.
On Wednesday, telcos secured spectrum in 11 circles in 900 MHz; nine circles in 800 MHz; eight circles in 1800 MHz; and 11 circles in 2100 MHz. “There is still spectrum, which is yet to be sold,” DoT said.
In the 800 MHz band, out of 20 circles, 14 have seen activity. In the 2100 MHz band, 14 have seen activity out of a total of 17. In 900 MHz, all 17 circles have seen activity, whereas in 1800 MHz, 13 circles have seen activity from 15 circles.
Through the ongoing auction, the government is selling 380.75 MHz of spectrum in the 800-MHz, 900-MHz and 1,800-MHz bands, besides five MHz in the 2,100-MHz band, across 17 of the 22 circles. The government had estimated that the auction would generate Rs 80,000-1 lakh crore from the sale of spectrum.
Till now, the most aggressive bidding has happened in the 900-MHz band, which is used for offering voice services. According to new norms, this band can also be used for 3G mobile services. The highest revenue for the government will also come from this band.
DoT won’t be able to announce the final results of the auction because of a Supreme Court order barring it from doing so without its permission. A hearing in the apex court in this regard is scheduled for March 26.
