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Spectrum auction starts with a bang

Bids in all bands, worth a total of Rs 60,000 cr on opening day; bodes well for govt's revenue target

BS Reporter  |  New Delhi 

The telecom got off to an enormous start on Wednesday, the first day, with bids worth Rs 60,000 crore.

This might surpass the government’s expectations of getting Rs 80,000-100,000 crore.

In February last year, the auction for spectrum in the 900- and 1,800-MHz bands, it had bids worth Rs 40,000 crore on the first day. In total, government earned Rs 62,000 crore from the auction last year.

“The bidding has taken place in all bands. At present, a value of about Rs 60,000 crore has been committed by bidders against the value (at reserve price) of around Rs 49,000 crore of provisionally won spectrum,” according to sources.

The spectrum is on sale in all the four bands — 800, 900, 1,800 and 2,100-MHz bands. Department of Telecommunications (DoT) officials expect the bidding to go on for some weeks.

Bidding in the 900-MHz and 2,100-MHz bands saw aggressive bidding; 800-MHz was the surprise band, with a lot of interest. However, there was not much bidding in the Mumbai, Delhi and Karnataka circles in 2,100 MHz.

At the end of Round 6, excess demand was witnessed in 900 MHz in the circles of Himachal Pradesh, Odisha, Punjab, Uttar Pradesh (East) and UP (West), and for 1800 MHz in Andhra Pradesh. The price increment applicable for Round 7 stands for Bihar, Himachal Pradesh, Odisha, Punjab, Rajasthan, UP (East) and UP (West) in 900 MHz. Also, for Andhra Pradesh in 1,800 MHz and for Assam, the Northeast, Odisha and Rajasthan in 2,100 MHz, according to a report.

It’s a do or die situation for many whose licenses are due for renewal towards the end of this year. Bharti Airtel’s licences in six circles, India in seven circles, in nine and Reliance Telecom (a unit of Reliance Communications) in seven circles are coming for renewal in 2015-16.

Other companies taking part in the auction include Reliance Jio, Tata Teleservices, Uninor and Aircel. All telcos together have deposited earnest money of Rs 20,435 crore.

“The auction is likely to see intense bidding by telcos to retain their existing spectrum and to acquire new spectrum, as supply is limited,” Fitch Ratings said in a report on Wednesday.

Last week, the Supreme Court asked the government not to finalise the results without their permission, while giving a go-ahead for the auction process. The next hearing in the SC is scheduled for March 26.

Kolkata-based mjunction services, auctioneer in the 800, 900, 1,800 and 2,100-MHz band, is a 50:50 venture by Steel Authority of India and TATA Steel. The auction is between 9 am and 7.30 pm from Monday to Saturday, except holidays.

The government plans to sell 380.75-MHz of spectrum in three bands — 800 MHz, the premium 900 MHz and 1,800 MHz — and 5 MHz in the 2,100- MHz band which is used for third-generation services, across 17 of the 22 circles.

The reserve price is Rs 3,646 crore pan-India per MHz in 800 MHz, Rs 3,980 crore for 900 MHz pan-India, and Rs 2,191 crore pan-India in 1,800 MHz. And, Rs 3,705 crore per MHz for 2100 MHz in 17 circles.

First Published: Thu, March 05 2015. 00:50 IST