Spectrum auction off to a blazing start, raises Rs 41,918 crore on 1st day

fe Bureau Posted online: Tuesday, Feb 04, 2014 at 0000 hrs
New Delhi : The auction for 2G spectrum got off to a flying start on Monday with bids worth Rs 41,918 crore coming in after seven rounds. Eight mobile operators, including incumbents Bharti Airtel, Vodafone and Idea Cellular together with newcomer Reliance Jio Infocomm participated on day one. The response was tremendous, surpassing that seen on the first day of the 3G auctions held in mid-2010. On Monday, airwaves were auctioned by the government in the 1800 MHz and 900 MHz bands. Analysts said the response in future rounds may be subdued given that Monday’s bidding saw demand exceeding supply only in two circles, Mumbai and Gujarat.

All 22 circles in the 1800 MHz band and the three metros for which spectrum is up for auction in the 900 MHz band received bids within the first four rounds. For the three circles where the more efficient 900 MHz band is available — Delhi, Mumbai and Kolkata — total bids went up to Rs 16,685 crore.

Delhi saw an increase of 19.26% over the reserve price, while for Mumbai, the bid price was higher by 44.5% than its base price. The bid for the Kolkata circle came in 38.22% higher than its reserve price of Rs 173.16 crore per MHz.

In the 1800 MHz band, the total bids made by the eight operators for 22 circles came to Rs 25,233 crore. Demand was strong for Gujarat, where demand was in excess of the available 60 blocks. Metros like Delhi, Mumbai and Kolkata saw reasonable demand; the eighth round of the auction will resume on Tuesday.

The base price set for 1800 MHz is R1,765 crore per MHz, 26% lower than the reserve price set at the March 2013 auction and 51% lower than that at the November 2012 auction. For 900 MHz, the reserve price is 53% lower than the previous auction price — it has been set at R360 crore per MHz for Delhi, R328 crore for Mumbai and R125 crore for Kolkata.

The eight players in the fray include Bharti Airtel , Vodafone, Reliance Jio Infocomm, Idea Cellular, Telewings (Uninor), Reliance Communications, Tata Teleservices and Aircel.

The department of telecommunications has put on the block about 385 MHz of radio waves in the 1800 MHz band and 46 MHz in the 900 MHz band.