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Seven telecom companies submit Rs 15,000 crore earnest money for auction

In a seemingly tepid build-up to the upcoming spectrum sale, due on October 1, seven mobile operators are said to have deposited earnest money of about Rs 15,000 crore, lower than the previous year's Rs 20,435 crore.

By: | New Delhi | Published: September 16, 2016 8:42 PM
"The cumulative EMD (earnest money deposit) submitted by seven telecom operators is about Rs 15,000 crore," industry sources told. (PTI) “The cumulative EMD (earnest money deposit) submitted by seven telecom operators is about Rs 15,000 crore,” industry sources told. (PTI)

In a seemingly tepid build-up to the upcoming spectrum sale, due on October 1, seven mobile operators are said to have deposited earnest money of about Rs 15,000 crore, lower than the previous year’s Rs 20,435 crore.

“The cumulative EMD (earnest money deposit) submitted by seven telecom operators is about Rs 15,000 crore,” industry sources told PTI.

However, the same could not be officially confirmed. When contacted, companies too refused to comment on the numbers.

A DoT official, however, said the EMD cannot be linked to the scale of bidding.

“In 2010, when Infotel Broadband, now Reliance Jio, applied for auction, no one was able to link their EMD with the pan-India bids that they placed. There were established players that were participating in that auction, but Infotel emerged as the pan-India winner of BWA spectrum,” the official said.

The official, however, refused to share EMD figures.

According to industry sources, Reliance Jio has deposited the highest guarantee of nearly Rs 6,500 crore while Vodafone has submitted an EMD of about Rs 2,800 crore.

Idea Cellular and Bharti Airtel are understood to have submitted about Rs 2,000 crore and 1,900 crore, respectively, ahead of the auction where airwaves worth Rs 5.63 lakh crore will go under the hammer.

The balance has been submitted by Tata Teleservices, RCom and Aircel. EMD is indicative of a company’s strategy to bid in specific circles and spectrum bands. It gives them eligibility points with regard to those circles.

Spectrum is a critical part of telecom networks used by companies to provide mobile or wireless services. This time, mobile frequencies in all bands — 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz — will be put on the block in the upcoming auction.

The finance ministry in the Budget pegged the revenue target at Rs 98,995 crore from the telecom space, which includes Rs 64,000 crore from the auction of about 2,354.55 Mhz of spectrum and the rest from various levies and services this financial year.

All the radiowaves being put up for auction can be used for high-speed 4G services.

This is the first time the government will auction premium airwaves in the 700 Mhz band. This is considered as the most premium as the cost of providing service is one-third of 3G under the 2100 Mhz band.

In a recent interview to PTI, Telecom Minister Manoj Sinha had said service providers not buying airwaves will not be able to take on competition.

Sinha had added that companies need spectrum to give good quality service, increase revenue and “maintain a good image” and he expected an enthusiastic participation.

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