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Rediff News  All News  » Business » Day 3: Spectrum auction completes 17 rounds, bidding continues

Day 3: Spectrum auction completes 17 rounds, bidding continues

February 05, 2014 19:34 IST

The third round of spectrum auction continued to witness aggressive bidding even after completion of seventeen rounds on Wednesday with demands for both bands of airwaves on offer continuing to pour in.

Spectrum auction took off from about Rs 45,000 crore (Rs 450 billion) revenue mark on Tuesday.

"The Auction of spectrum in the 1800 MHz and 900 MHz band that began on 3rd February 2014 has completed Seventeen rounds. Auction recommenced with the 15th Round today at 9 a.m.  Bidding is ongoing," an official statement said.

The ongoing spectrum auction has surpassed November 2012 and March 2013 auction both in terms of revenue and duration.

Out of five online spectrum auctions, the present auction is largest in terms of quantum of airwaves placed put for sale and third longest till date in terms of duration.

Eight companies -- Reliance Jio Infocomm, Vodafone, Airtel, Aircel, Tata Teleservices, Idea Cellular, Telewings (Uninor) and Reliance Communications -- are in fray for spectrum that they will have the right to use for 20 years.

3G auction in 2010 lasted for 34 days, broadband wireless airwaves ended in 16 days while 2G auction in November ended in two days and CDMA auction in March concluded the same day.

Government has put about 385 megahertz of spectrum for auction in 1800 Mhz band most of which were freed from cancellation of 122 licences by Supreme Court in 2012.

The apex court had directed government to put all spectrum thus freed. However, there was minimal demand seen for this 2G spectrum. Aggressive bidding is being witnessed in 900 Mhz band in three metros -Delhi, Mumbai and Kolkata where total of 46 Mhz of airwaves had been put for auction.

The spectrum in 900 Mhz band put for auction is held by Vodafone, Airtel and Loop. While Loop Mobile is not participating in auction, it is a must win situation for Vodafone and Airtel in auction to retain their airwaves.

New entrant Mukesh Ambani led Reliance Jio Infocomm is also competing for these airwaves. Mobile signal transmitted in 900 Mhz band gives almost double coverage than those transmitted in the 1800 Mhz band.

On the second day of auction, government received bids worth Rs 25,500 crore (Rs 255 billion) were received for 251 Mhz of spectrum in 1800 Mhz band (2G). Bids for about Rs 19,000 crore (Rs 190 billion) -- 42 per cent of total bid value -- was received for just 46 Mhz of spectrum 900 Mhz band.

Even if bidders opt to pay the final auction price in installments, the government will get at least Rs 11,790 crore (Rs 117.90 billion) as per data based on second day figures, exceeding the target of Rs 11,343 crore (Rs 113.43 billion) in upfront payments.

The budget for 2013-14 set a total target of Rs 40,874 crore (Rs 408.74 billion) from spectrum revenue in this fiscal and a bumper collection for airwaves auction would help the government help to keep fiscal deficit under control.

The country's fiscal deficit at Rs 5.16 lakh crore has already crossed 95 per cent of budget target in the first nine months of 2013-14.