Spectrum auction takes off from Rs 58,980 cr on 9th day

PTI Posted online: Wednesday, Feb 12, 2014 at 0000 hrs
New Delhi : Spectrum auction took off today from Rs 58,980.29 crore mark with demand for the premium 900 Mhz band seemingly tapering off at the end of 56 rounds.

"The 57th round of auction started at 9 am today. First round was over by 10 am and 58th round started at 10.30 am. There is a demand in 1800 MHz band," an official source said.

The pace of bidding at the end of 56 rounds slowed down compared to the trend seen in the past 8 days. At the end of 56th round, total bids worth Rs 58,980.29 crore had been received, which was about Rs 650 crore more than total bids worth Rs 58,332 crore received at end of 7th day.

After the 56th round, total bids worth Rs 35,390.67 crore were received in 1800 MHz band, which is 100.6 per cent of its value at the base price, and Rs 23,589.62 crore in 900 Mhz, about 85 per cent higher.

No change was witnessed in the price of 900 MHz band between 7th and 8th day, indicating prices of airwaves in three circles like Delhi, Mumbai and Kolkata were stabilising.

However, bidding activity picked up in the 1800 Mhz band for Delhi and Mumbai. The price for Delhi has more than doubled to Rs 364 crore per megahertz, from a reserve price of Rs 175 crore per Mhz; whereas Mumbai has seen a jump of 52.51 per cent to Rs 251.65 crore per Mhz from a base price of Rs 165 crore.

Other circles witnessing activity in 1800 Mhz include Andhra Pradesh, Assam, Haryana and Kerala.

The price in Andhra Pradesh has increased to Rs 163 crore per Mhz from a base price of Rs 130 crore, Assam price has risen to Rs 30.7 crore per Mhz from Rs 7 crore.

The total amount bid so far is about 87 per cent of what 3G radiowaves auction fetched in 2010, although the current round has far more spectrum for the two bands on the block.

The 3G auction in 2010 had fetched the government Rs 67,718.95 crore.

Bids received at the end of 8th day ensured that the government will now get at least Rs 17,576.32 crore in the current fiscal from the auction in case companies opt for instalment mode.

The bidders can pay the part of the money upfront and the remaining amount over a maximum of 10 yearly instalments.

SPECTRUM 2 LAST At Rs 741 crore per megahertz bid, the price of 900 Mhz band in Delhi has more than doubled compared to base price fixed by the government, and for Kolkata, at Rs 194.63 crore per Mhz, it is up by over 55 per cent and for Mumbai, Rs 563 crore per Mhz, about 72 per cent higher than the reserve price.

Out of five online spectrum auctions, the present auction is largest in terms of radiowaves on sale, and third longest till date in terms of duration.

3G auction in 2010 lasted for 34 days, broadband wireless access (BWA) ended in 16 days. 2G auction in November 2012, on the other hand, ended in just two days, while the CDMA auction in March last year concluded the same day.

There is no time limit for the sale of spectrum and the duration of the current auction will depend on the appetite of the eight companies in the fray - Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio Infocomm, Aircel, Tata Teleservices, Telewings (Uninor) and Reliance Communications.

The government has put on the block about 385 Mhz of spectrum in the 1800 Mhz band, and 46 Mhz in 900 Mhz.