The government grossed around R56,792 crore at the end of the second day of the spectrum auction on Monday. This is R3,262 crore more than what it clocked on the first day, October 1. There was no change in the activity level from October 1, which continues to be at 90%, while with six round of bids on the second day the total number of rounds so far stands at 11.
The 2300 MHz band, which is a 4G band, emerged as the most sought after band, getting bids in all the 22 circles, followed by 1800 MHz, also a 4G band, where bids were not received in only two circles — Karnataka and Odisha.
As reported earlier, there were no bids for 700 MHz spectrum, which means there will not be any bids in the coming days also in this band because most of the points get exhausted in the first round itself and there is very little option to park points in other bands and come back to 700 MHz in future rounds.
The reason for the complete washout in this band is the reserve price, which is the highest at R11,485 crore per MHz. According to Prashant Singhal, global telecommunications leader, EY, “No bidding in the premium 700 MHz band clearly indicates that the operators are not ready to commit investments to the overly priced band with underdeveloped ecosystem. The reserve price of the digital dividend band in India per MHz per pop adjusted to Arpu is pegged at approx 1.8x Argentina and 4.8x Brazil.”
As reported earlier, the reason for no bids in the 900 MHz band is because there’s very little, fragmented spectrum here across only four circles. Another notable feature of the auction is that the bulk of the spectrum so far has been bid at the reserve price, barring a few circles across bands.
In the 800 MHz band, bids were received only in the four circles of Gujarat, Punjab, Rajasthan and Uttar Pradesh (east). Of these, the price increase was only in Gujarat — 10.4% over the reserve price.
In 1800 MHz, bids were received in 20 out of 22 circles — only Karnataka and Odisha didn’t receive bids, which was the case on day one also. Kolkata (1.4% of reserve price), Mumbai (38.8%), UP east (3%), and UP west (4.5%) received bids higher than the reserve price.
In 2100 MHz, which is a 3G band, no bids were received across 12 circles. On day one, no bids were received in 13 circles. Operators were bidding for select circles such as Delhi, Bihar, Jammu and Kashmir, Kerala, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, and UP (east) circles.
In 2300 MHz, all circles received bids while price increases were witnessed in four circles — Bihar (1.5% of reserve price), Gujarat (40.2%), Karnataka (8.2%) and Maharashtra (7.1%).
In 2500 MHz, 12 circles received no bids against 13 not receiving any on day one.
The department of telecommunications has put on sale spectrum in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands, with a total price tag of Rs5.63 lakh crore at base rates. Seven telecom companies including Bharti Airtel, Vodafone India, Idea Cellular, Reliance Jio Infocomm, Reliance Communications, Tata Teleservices and Aircel had qualified for participating in the spectrum sale