Telecom firms of Ambani brothers Mukesh and Anil as well as Bharti Airtel, Vodafone and Idea are among the eight companies...
Telecom firms of Ambani brothers Mukesh and Anil as well as Bharti Airtel, Vodafone and Idea are among the eight companies vying to buy spectrum in the biggest ever auction that may fetch the government about Rs 1 lakh crore.
The government plans to sell the second-generation or 2G and third-generation 3G radiowaves in an auction scheduled to start from March 4.
At the close of applications today for participating in the auction, eight telecom companies including Mukesh Ambani- led Reliance Jio, Airtel, Vodafone, Idea Cellular, Anil Ambani -led Reliance Communications, Uninor, Aircel and Tata Teleservices have applied.
However, Sistema Shyam Teleservices Ltd (SSTL), a potential buyer of CDMA spectrum, opted out citing high price and legal issues with the DoT. Videocon Telecom did not submit its application either.
A Department of Telecom official said: “Airtel, Vodafone, Idea Cellular, Reliance Communications, Aircel, Reliance Jio Infocom, Uninor and Tata Teleservices have submitted forms.”
Most of the spectrum being put up for the auction is presently held by Airtel, Vodafone, Idea Cellular and Reliance Telecom. Their licences are expiring in 2015-16.
Idea Cellular’s 9 circles, 6 circles of Airtel and 7 circles each of Vodafone and Reliance Telecom are coming up for renewal.
Overall there are 29 licences in 18 service areas which expire in 2015-16. These licences hold 184 MHz spectrum in the 900 MHz band and 34.2 MHz in 1800 MHz band.
It is mandatory for these companies to bid for spectrum if they have to continue offering mobile and other telecom services as their permit is expiring.
An SSTL spokesperson said the company has “consistently maintained that the pricing of 800 Mhz spectrum at Rs 3,646 crore per MHz, is way out of line and does not merit a strong business case for buying additional spectrum”.
It has also approached the Telecom Disputes Settlement and Appellate Tribunal seeking directions against the DoT for reassignment/rearrangement of the blocks/frequencies of liberalised spectrum allotted to SSTL during the auction held in March, 2013 in 8 circles for its CDMA services.
However, participation of Reliance Jio Infocomm, Uninor, Tata Teleservices and Aircel has enhanced the chances of aggressive bidding in the auction, which may fetch the government around Rs 1 lakh crore.
While the auction of the 2G and 3G radiowaves is expected garner Rs 82,395 crore at the base or minimum price, sources said the government expects the total proceeds to exceed Rs 1 lakh crore.
The government has approved the minimum or auction start price for the 2,100 Mega-Hertz band or 3G spectrum, which will garner at least Rs 17,555 crore. The reserve price for auction of 2G spectrum in 800 MHz, 900 Mhz and 1800 MHz bands will fetch the government Rs 64,840 crore.
The government plans to sell 380.75 MHz of spectrum in the three bands – the premium 900 MHz band, 1800 MHz and 800 MHz, besides 5 Mhz in the 2100 Mhz band across 17 out of 22 telecom areas.
It has fixed a reserve price of Rs 3,646 crore per MHz for pan-India in the 800 MHz band; Rs 3,980 crore for 900 MHz band pan-India (excluding Delhi, Mumbai, Kolkata, and J&K); Rs 2,191 crore pan-India (excluding Maharashtra and West Bengal) in the 1800 MHz band.
For 2100 Mhz band which is used for 3G services, the price of spectrum per MHz has been fixed at Rs 3,705 crore.
The government had garnered about Rs 62,162 crore from the last auction in February 2014.
Proceeds from this year’s auction are expected to help the government reach its fiscal deficit target of 4.1 per cent of GDP.