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Rediff.com  » Business » Spectrum auction takes off on 8th day

Spectrum auction takes off on 8th day

Last updated on: February 11, 2014 14:41 IST

The ongoing spectrum auction commenced for the eighth day today, entering the 50th round, with the government already receiving bids worth Rs 58,332 crore (Rs 583.32 billion).

"The auction started in the morning. Bidding is going on," an official said.

Bids worth Rs 34,743.2 crore (Rs 347.43 billion) have been received for 1800 MHz and Rs 23,589.62 crore (Rs 235.90 billion) for 900 MHz.

The amount generated so far is about 86 per cent of what the 3G auction fetched in 2010. It had fetched the government Rs 16,750.58 crore (Rs 167.51 billion) for 5 MHz of pan-India spectrum -- a total of Rs 67,718.95 crore (Rs 677.19 billion).

The government will now get at least Rs 17,362.66 crore (Rs 173.63 billion) in the current fiscal from the auction in case companies opt for instalment mode.

The bidders can pay part of the money upfront and the remaining over a maximum of 10 yearly instalments.

The present auction is the largest in terms of radiowaves on sale and the third-longest in terms of duration.

The 3G auction in 2010 lasted for 34 days, broadband wireless access (BWA) ended in 16 days. The 2G auction in November 2012, on the other hand, ended in just two days, while the CDMA auction in March last year concluded the same day.

There is no time limit for the sale of spectrum and the duration of the current auction will depend on the appetite of the eight companies in the fray -- Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio Infocomm, Aircel, Tata Teleservices, Telewings (Uninor) and Reliance Communications.

The government has put on the block about 385 MHz of spectrum in the 1800 MHz band and 46 MHz in 900 MHz band.

At Rs 741 crore (Rs 7.41 billion) per megahertz bid at the end of 49 rounds, the price of 900 MHz band in Delhi has more than doubled as compared to the base price fixed by the government.

For Kolkata at Rs 194.63 crore (Rs 1.95 billion) per MHz, it is up by over 55 per cent and for Mumbai at Rs 563 crore (Rs 5.63 billion) per MHz, it is about 72 per cent higher than the reserve price.

The price of 2G spectrum band quadrupled in Assam service area at Rs 26.95 crore (Rs 270 million) per MHz. In Maharashtra, the price of 2G spectrum closed at Rs 265.7 crore (Rs 2.66 billion) per MHz, about 1.5 times of base price, and for Madhya Pradesh, it closed at Rs 47.7 crore (Rs 477 million) per MHz, more than double the reserve price fixed by the government.

High demand for 1800 MHz spectrum band was seen in Gujarat as well where price increased by 61 per cent. The price in Delhi registered 58 per cent increase while in UP West, it rose 53 per cent as compared to the base price at the end of the 49th round.

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