However, at the end of day four, the demand for this spectrum in the three circles is petering out with prices in Mumbai and Kolkata remaining the same between the third and the fourth day.
Since the auction design allows operators to get out of one circle and get into another, with prices reaching high in the three circles, the operators have shifted focus on the 1,800 Mhz band.
At the end of day four, participation in the 1,800 Mhz band saw Assam, Madhya Pradesh, UP (E), UP (W) and J&K circles getting higher demand than the spectrum blocks available in these circles. While the bid price at the end of day four for Assam was 79% higher than the reserve price, Bihar saw its bid price increase by 14% over the base price and Gujarat bids went 39% higher than reserve price. Other circles, including Delhi, J&K, Madhya Pradesh, Maharashtra, and UP (West) also saw the bid price at close of day four, exceeding the reserve price. In all other circles, the bid price remained at the base price level.
In May 2010, the government received R67,000 crore from the 3G auctions and the bidding went on for over a month. But this time around the government earned R52,000 crore in just four days. The outgo will put pressure on the telecom companies as it comes at a time when they were recovering from the intense price wars by increasing the realisable tariff. Since the additional cost on spectrum would not lead to revenue enhancement but would only go in protecting revenues, the companies would bleed.