Voda, Airtel bag Mumbai, Delhi, Jio gets Bharat
Feb 13 2014 , New Delhi
Govt rakes in Rs 61,162 cr after 10 rounds on intense bidding
Mukesh Ambani’s Reliance Jio Infocomm, which surprised by entering the fray despite owing pan-India 4G spectrum, bid aggressively for both the bands of airwaves on offer — the premium 900 MHz and not so efficient 1,800 MHz, but chose spectrum only in the later band in 14 out of the 22 circles.
Vodafone, whose licences in Delhi, Mumbai and Kolkata were due to expire in November this year and desperately needed spectrum in the auction to continue operations, put in bids worth Rs 19,600 crore to win 900 MHz airwave in the three metros and 2G 1,800 MHz spectrum in 11 circles or zones.
Airtel, whose licences in Delhi and Kolkata were due to expire in November, won back 900 MHz in both these metros and added the same in Mumbai. It also won 1,800 MHz spectrum in 15 circles. It put in total bids worth Rs 18,530 crore for a total of 115 MHz of spectrum in 900 MHz and 1,800 MHz bands. The Sunil Bharti Mittal-promoted firm said it would roll out pan-India 4G network using 1,800 MHz.
Idea was the only other company to win the 900 MHz spectrum, which is capable of 3G communications, in Delhi.
The auction fetched the government Rs 61,162 crore, of which Rs 18,296.36 crore will flow to the exchequer within this financial year as the companies have the option to pay 33 per cent upfront for the 1,800 Mhz band, 25 per cent in case of 900 Mhz band and the remainder through to 2026.
The government was initially expecting only Rs 11,300 crore of revenues to come from the spectrum auction this year.
Uninor won spectrum in five circles in 1,800 Mhz band — UP East, UP West, Bihar and Jharkhand and Andhra Pradesh.
Idea got 11 circles in the same band. Anil Ambani’s Reliance Communications won just one circle of 1,800 Mhz in Mumbai. Tata Communications drew blank. Aircel got five circles.
“I am very happy to report that the auction is over. The total revenue that will come to government is Rs 61,162.22 crore. To that extent, this particular auction has been extremely successful. We will see a smile on the face of the finance minister,” telecom minister Kapil Sibal said.
Finance minister P Chidambaram faces a challenge to meet the budget deficit target for this financial year amid a shortfall in tax collections and revenue receipts from disinvestment of stakes in public sector firms.
The eight companies, which participated in the auction, slugged it out for the radiowaves, with the bidding stretching to 68 rounds.
Telecom secretary MF Farooqui said bids worth Rs 37,572.60 crore came in for radiowaves in the 900 Mhz band, and Rs 23,589.62 crore for the 1,800 Mhz band.
The government had put on the block about 385 Mhz of radiowaves in the 1,800 Mhz band, and 46 Mhz in the 900 Mhz band. Bids were received for around 78 per cent of the blocks in the 1,800 Mhz band, and 100 per cent in the 900 Mhz band. About 78 Mhz remained unsold in the 1,800 Mhz band.
The value of the total spectrum on sale was Rs 47,933.40 crore at reserve price. The bidding amount for 1,800 Mhz crossed its value of the reserve price, while for 900 Mhz, the price rose by over 85 per cent.
The total bid value of the spectrum in the two bands crossed over 90 per cent of the money that the government had received in the 3G spectrum auction in 2010, which fetched Rs 67,718.95 crore, although the quantum of radiowaves put up for sale in the latest round was higher. On whether the strong bidding will impact mobile tariffs, Sibal said: “This successful auction will really be successful if we are able to provide efficient service to consumers. The ultimate objective is that service must be provided efficiently and at a relatively affordable price. We hope the tariffs will remain reasonable in the years to come.”