Spectrum auction in progress, government expecting Rs. 11,300 crore

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Spectrum auction in progress, government expecting Rs. 11,300 crore
The third round of spectrum auction started on Monday with eight telecom companies in the fray, from which the Indian government expects to garner at least Rs. 11,300 crores.

"The auction started at 9AM today," an official source said.

The Indian Department of Telecom (DoT) has put on block around 385MHz of radiowaves in the 1800MHz band, and 46MHz in the 900MHz band.

As per the rules of the auction, every company has been given quota of 240 minutes to extend bid round. This means throughout the auction, each company can extend auction round by total of 4 hours.

(Also see: Eight telecom operators apply for February 3 spectrum auction)

Normally 6-7 rounds take place in a day with each round of 60 minutes. There is a 20-minute break between the rounds.

The government has to conduct this third round of spectrum auction following an order by India's apex court - The Supreme Court in 2G case directing that all the radiowaves freed from the cancellation of 122 licences in February 2012 should be auctioned.

(Also see: Supreme Court orders unsuccessful 2G spectrum bidders to cease operation)

Besides, 900MHz has to be auctioned as some of the radiowaves in this band are held under old telecom licences which will start expiring from November 2014.

The 3G auction in 2010 lasted for 34 days, while the auction in November 2012 lasted for two days and March auction last year lasted for only one day.

In November 2012, bids worth Rs. 9,407 crores were received for spectrum worth Rs. 28,000 that was offered.

In March 2013, no GSM operators bid at the auction and only CDMA operator Sistema Shyam bought spectrum of about Rs. 3,600 crores in eight of the 21 service areas.

It is necessary for Vodafone to get spectrum in major Indian cities Delhi, Mumbai and Kolkata; for Airtel in Delhi and Mumbai, and Loop Mobile in Mumbai for continuing operations because their licences are expiring in November.

(Also see: Vodafone offers Rs. 4,000 crore for retaining 2G spectrum in three circles)

The government is hopeful of all the spectrum put on the auction table being sold out.

The government has set a target of Rs. 40,874.50 crores for this fiscal from spectrum, including the auction amount, one-time spectrum charge and annual regular licence fee.


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