Govt nets a cool Rs 61k cr from spectrum auction

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Idea Cellular became the fourth player in Delhi and Mumbai, while Reliance Communications was the fifth player in Mumbai. Idea Cellular became the fourth player in Delhi and Mumbai, while Reliance Communications was the fifth player in Mumbai.
SummaryBharti, Vodafone together shell out Rs 38k cr; 900 MHz sold out

from other agencies and operators who are grossly under-utilising this important spectrum band,” said Gopal Vittal, joint MD & CEO – India, Bharti Airtel.

Vodafone, which retained its total 900 MHz spectrum holding spread over Delhi, Mumbai and Kolkata has spent Rs 19,600 crore to buy entire spectrum holdings in both 1,800 MHz and 900 MHz bands. It bought 1,800 MHz spectrum in 11 circles including the three metros, Gujarat, Karnataka and Kerala.

Marten Pieters, managing director & CEO, Vodafone India said: “We are pleased to have secured our business for the next 20 years in three of our most important circles by buying enough spectrum to continue our successful journey. We have also opened the door to the next generation of mobile technology – 4G – by acquiring 1,800 MHz spectrum in the places where we expect this market to take off first.”

Meanwhile, the industry has sought rationalisation of spectrum usage charge and USO funds from the government to compensate for the high cost of acquiring spectrum. “In order to help the industry overcome this huge financial burden, the government should address the high tax/levy structure on the industry. We would urge the government to reduce the SUC and the USOF levy to 1% to provide some relief to the telcos,”said Rajan S Mathews, director general, COAI.

However, analysts do not expect a return of the high tariff regime. “The overall outcome of the higher input cost should have been increase in tariff, however, due to intense competition, it is unlikely to get passed on to the consumer,” said Hemant Joshi, partner, Deloitte Haskins & Sells.

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