Spectrum auction: Govt gets bids of Rs 42K cr on first day

Written by ENS Economic Bureau | New Delhi | Updated: Feb 4 2014, 14:16pm hrs
Telecom towerThe govt has to conduct this third round of spectrum auction following a Supreme Court order cancelling 122 licences in February 2012.
Telecom firms have together put in bids of around Rs 42,000 crore on the first day of 2G spectrum auctions.

This has brought respite for the government, struggling to fund its fiscal deficit, as the estimated collection on the first day has exceeded its target of Rs 40,874.50 crore from auctions and other charges, of which Rs 11,300 crore is expected in the current financial year. A government release said that the auctions went on for seven rounds on the first day with the top 12 circles, including Delhi and Mumbai, witnessing participation from eight telecom players.

The auctions are being held for all 22 circles for 900 MHz band in Delhi, Mumbai and Kolkata circles and for 1,800 MHz band in the rest. Delhi and Mumbai are witnessing huge activity, primarily due to Vodafone and Airtel competing to fetch 900 MHz band in these two circles.

Currently, Airtel doesnt have the band in Mumbai. Vodafone, too, needs additional spectrum in Delhi, Mumbai and Kolkata. Eight telecom firms, including Bharti Airtel, Vodafone and Reliance Jio Infocomm, are in the fray, and are bidding for about 385 MHz of radiowaves in the 1800 MHz band and 46 MHz in the 900 MHz band.

The auction started, as planned, after the Supreme Court yesterday refused to interfere with the order of the telecom tribunal dismissing the pleas of Bharti Airtel, Vodafone, Loop and Idea for a stay on the spectrum auction and extension of their licences by another 10 years. The government is conducting the third round of spectrum auction for the 1800 MHz band following a Supreme Court order in the 2G case directing that all radiowaves freed from the cancellation of 122 licences in February 2012 should be auctioned. The 900 MHz has to be auctioned as some of the radiowaves in this band are held under old telecom licences, which will start expiring from November 2014. This includes, Vodafone and Airtel licences for telecom circles in Mumbai and Kolkata.

The government failed to generate interest from telecom companies in its earlier attempts in November 2012, which lasted for two days, and in March last year that lasted for just a day. The government collected Rs 9,407 crore of bids in November 2012. In March 2013, when CDMA airwaves were auctioned, the government collected just Rs 3,600 crore.