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Govt nets a cool Rs 61k cr from spectrum auction

Feb 14 2014, 01:07 IST
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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

The 10-day long bidding for 2G spectrum ended on Thursday with the government raking in a total revenue of Rs 61,162.22 crore. Of the total amount, Rs 38,000 crore, or 63%, was contributed by Bharti Airtel and Vodafone India, the country's top two telecom players. While Bharti paid a total of Rs 18,530 crore, Vodafone paid Rs 19,600 crore. Both companies, however, would shell out the total amount through deferred payments over 10 years.

In the more efficient 900 MHz band, competition was limited to Bharti and Vodafone in Mumbai and Kolkata circles, while in Delhi, Idea Cellular emerged as the third player, buying 5 MHz. The government earned a total of Rs 23,589.62 crore from this band, which can be used to provide both voice and high-speed data services.

The 1800 MHz band spectrum in the three metros —Delhi, Kolkata and Mumbai — was won by Bharti, Vodafone and Reliance Jio. Idea Cellular became the fourth player in Delhi and Mumbai, while Reliance Communications was the fifth player in Mumbai. Total government earnings from this band is around Rs 37,572 crore, since only 80% of the total 385 MHz of spectrum put up for sale was bought.

Reliance Jio bought 1800 MHz spectrum in 14 circles including Gujarat, Maharashtra and Assam. All these circles have seen intense bidding.

This fiscal, the government will earn around Rs 18,296.36 crore if all winning operators opt for the deferred payment plan which entails an upfront payment of 33% of total price in 1,800 MHz (25% in 900 MHz) and the rest payable in 10 equal installments after a moratorium of two years.

“We will achieve our budgeted revenues of Rs 40,800 crore from the telecom sector for the fiscal. This includes the auction proceeds, licence fee, spectrum usage charge and USO funds,” said MF Farooqui, secretary, department of telecom (DoT). He added that the one-time spectrum levy of around Rs 10,000 crore – which is stuck in legal tangles – has been made good by the high auction proceeds.

Bharti Airtel was able to buy 900 MHz band spectrum in the Mumbai circle where it did not have any spectrum in this band. It will make an upfront payment of Rs 5,425 crore, with the balance to be paid in 10 annual instalments of Rs 1,310 crore each, commencing two years from now.

“Future auctions should ensure that more spectrum in the 900 MHz band is secured

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