Day 1 bids for spectrum sale fetch Rs 14,259 cr
Feb 03 2014 , New Delhi
Five others – Reliance Jio Infocomm, Idea Cellular, Telewings (Telenor), Reliance Communication and Tata Teleservices – joined the fray for the same airwaves to give a tough fight to the existing licence holders.
After seven rounds of bidding on Monday the first day of the auction, the three cities of Mumbai, Delhi and Kolkata together saw bids worth Rs 14,250 crore from existing licence holders as well as licence hopefuls.
The highest bid for Delhi was 19.1 per cent more at Rs 427.2 crore per mhz than the government’s reserve price of Rs 359 crore.
For Mumbai the demand was the most, the highest quote for this city was Rs 477.42 crore per mhz, 46 per cent more than the reserve price of Rs 327 crore.
Kolkata also saw aggressive bids with the highest quote 39 per cent above the reserve price of Rs 125 crore.
Vodafone’s licences for Delhi, Mumbai and Kolkata will come up for renewal by November. Similarly, Airtel’s licence for Delhi and Mumbai and Loop’s for Mumbai are due to expire by the year-end. Across these three cities 46 mhz spectrum in the 900 mhz band is up for grabs.
Gujarat, UP (both east and west) and Bihar have been hotly bid for in the 1800 mhz spectrum band auctions. Eight telecom companies have put in bids for these areas.
Gujarat saw stiff bidding (the highest was 12 per cent above the reserve price). The highest bid in Bihar was 8 per cent more than the reserve price, in UP (East) 3 per cent, UP (West) 7 per cent, Himachal Pradesh 20 per cent, and West Bengal, Jammu & Kashmir saw 2 per cent each above their respective reserve price.
Telecom minister Kapil Sibal was confident that the government would earn more than the targeted Rs 11,300 crore from airwave auctions this financial year. “I am sure we can see a smile on the finance minister’s face after the auctions,” Sibal told reporters.
Finance minister Chidambaram is banking heavily on airwaves sale to trim the fiscal deficit to 4.8 per cent. The Cellular Operators Association of India director-general, Rajan S Mathews, told Financial Chronicle that the “auctions are off to a good start as bids have been received for all 22 circles in the 1800 mhz band and the three metros in the 900 mhz on day one itself.”
The government seems in for a bounty as the auctions enter the eighth round on Tuesday. An official confirmed receiving bids in all 22 circles the three metros. This is unlike the last round of auctions when many circles had no takers and auctions ended in less than a day. The government expects to mop up Rs 40,875 crore from these auctions, the amount including one-time fees, annual licence fees and spectrum usage charges.
The 2G auctions come after the Supreme Court on Sunday refused to interfere with the telecom tribunal order. The court dismissed petitions by Bharti Airtel, Vodafone, Loop and Idea, which wanted the auctions stayed and their licences extended by 10 years.
The telecom department has put on the block 385 mhz of radio waves in the 1800 mhz band and 46 mhz in the 900 mhz band. Normally, six to seven rounds of bidding take place in a day with each round of 60 minutes. There is a 20-minute break between rounds.
According to department officials, Vodafone cannot bid for spectrum in Assam, Bihar, Himachal Pradesh, Jammu and Kashmir, Madhya Pradesh, North East and Odisha and Reliance Communications cannot bid for West Bengal and Kolkata. Both companies already have operations in these circles. Analysts say the bidding for 1800 mhz spectrum has been ‘rational’ as there is substantial airwaves available for buying.
This third round of auction is also a result of an earlier Supreme Court order that cancelled 122 licences and ordered their auction.
The 3G auction in 2010 lasted 34 days, the auction in November 2012 lasted two days and that last March lasted less than a day.
In November 2012, bids totaling Rs 9,407 crore were received for spectrum worth Rs 28,000 that was on offer. Last March no GSM operator put in a bid and Sistema was the lone CDMA operator that bought spectrum paying Rs 3,600 crore in eight of 21 service areas.