Spectrum Auction: Day 4 Sees Bids Rising to Rs 63,500 Crore
The total amount of spectrum that will be offered for sale is 2,354.55 MHz. (Image: Reuters)
The government received cumulative commitments of Rs 63,500 crore from telecom operators at the end of bidding on Wednesday -- Day 4 of India's biggest spectrum auction.
While there were no takers for 700 MHz and 900 MHz bands at the auction for the fourth day running, major activity was seen in the 1,800 MHz band, according to data released by the Department of Telecommunications. There were six fresh rounds of bidding with the total rounds now standing at 23 after four days.
Day three had seen Rs 60,969 crore cumulative commitments from telecom operators after 17 rounds of bidding. The additional amount raised on the fourth day was Rs 2,531 crore.
"Nearly half of 3G spectrum put up for auction is witnessing traction, though not over any premium. The operators are clearly looking to plug the coverage gap in their 3G footprint," said Prashant Singhal, Global Telecom Leader, EY.
The maximum bids of 112 in the 1,800 MHz band were received for the Jammu & Kashmir circle with a provisional winning amount of Rs 2.60 crore per block. However, 48 blocks were not bid for. The second highest bids (also in same band) -- 81 -- were received for the Assam circle with a provisional winning amount of Rs 8 crore per block. However, this circle also saw 18 blocks without bids. In 1,800 MHz Mumbai circle saw 25 bids, with no excess bid. Some hectic activity was observed in 2,300 MHz, while 800 MHz, 2,100 MHz and 2,500 MHz saw a lukewarm response.
According to official sources, 956.8 MHz of total spectrum has been sold so far out of a total 2,354 MHz of spectrum that the government has put up for auctioning. 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 (Long-Term Evolution) 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 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.
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 a Internet-based, online process -- the government has hired the services of mjunction services. The government allots the right to the spectrum 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.