Spectrum Auction Garners Bids Worth Rs. 96,000 Crores at End of Day 7

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Spectrum Auction Garners Bids Worth Rs. 96,000 Crores at End of Day 7
As the seventh day of bidding in e-auctions of radio frequency spectrum concluded on Wednesday, the government had commitments of nearly Rs.1,00,000 crore from telecom operators.

The total commitments from the 43 rounds so far after seven days of aggressive bidding total Rs.96,000 crores, an official statement said. Day seven of bidding witnessed six rounds.

"The bidding is taking place in all bands. Brisk bidding was seen on the seventh day of bidding, with activity requirement set at 100 percent. There is aggressive bidding going on in 1800MHz, 900MHz and 800MHz bands," the statement said.

"At present, over 84 percent of the spectrum has been provisionally allocated to bidders at a value of approximately Rs. 96,000 crores. 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. Bidding would recommence tomorrow, that is, March 12, 2015 at 9am," it added.

The sixth day (Tuesday) saw bids worth Rs.92,200 crore after 37 rounds from Rs.94,000 crore a day earlier.

This was due to a shift of interest away from the 900MHz band, mainly to the 1800 MHz band, for which the price escalation was relatively lower.

The commitments come over and above the Rs. 2,00,000 crore that India Inc has already bid under the two phases of auctions for award of coal blocks. But the proceeds from this auction will go to the respective state governments over 30 years.

The central government has budgeted for Rs. 43,161.72 crores from e-auctions of spectrum for the current fiscal, while the reserve price for the entire spectrum on offer in four bands, across India, was around Rs. 80,000 crores.

The bids so far have well exceeded these numbers.

The maximum bids of 78 were received for Tamil Nadu circle with a winning amount of Rs. 45 crores per block in the 1800MHz band. However, this circle saw 17 less bids.

The second highest bids of 75 were received for Odisha circle with a winning amount of Rs. 4.97 crores per block in the 1800MHz band. This circle also saw six less bids.

The eight telecom service providers participating in the auctions are Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone India, Tata Teleservices, Uninor, Idea Cellular and Aircel.

They have submitted earnest money of Rs. 20,435 crores, which is two-and-a-half times what had been called for.

The total spectrum put up for auction is 103.75MHz in 800MHz band, 177.8MHz in 900MHz band and 99.2MHz in 1800MHz band for second generation (2G) telephony. The government has also put up 5MHz in the 2100MHz band for third generation (3G) telephony.

The government had fixed a reserve price of Rs. 3,423 crores for per MHz for 800MHz frequency, Rs. 3,399 crores for 900MHz band and Rs. 1,425 crores for the 1800MHz band. The government also fixed a reserve price of Rs. 3,511 crores per megahertz for the frequency for 3G spectrum.

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