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  1. Rs 8,000 cr raised from spectrum auction on Day 5

Rs 8,000 cr raised from spectrum auction on Day 5

Telecom companies continued with their aggressive bids for airwaves on Monday with the government adding Rs 8,000 cr...

By: | New Delhi | Updated: March 10, 2015 1:51 PM
Mobile licences for nine circles of Idea Cellular, six circles of Airtel and seven circles each of Vodafone and Reliance Telecom are coming up for renewal. (Thinkstock) Mobile licences for nine circles of Idea Cellular, six circles of Airtel and seven circles each of Vodafone and Reliance Telecom are coming up for renewal. (Thinkstock)

Telecom companies continued with their aggressive bids for airwaves on Monday with the government adding Rs 8,000 crore on the fifth day of the spectrum auction, taking the total amount to Rs 94,000 crore at the end of 31 rounds of auction.

In all, seven rounds of auction were held on Monday.

Sources said bidding continued to be robust in 900 MHz, 800 MHz and 2100 MHz band of spectrum, while bidding was normal in the 1800 MHz. However, telcos have not yet bid for in 2100 MHz of 3G spectrum for Delhi and Mumbai circles.

On day five, bidding for the 900 MHz band was already up 65 % over the reserve price from 58% on the fourth day of the auction. On day two, bidding for the 900 MHz band was already up 45% over the reserve price.

There was aggressive bidding in 900 MHz band in circles like Gujarat, Karnataka, M.P and Rajasthan on day five of the auction.

However in 800 MHz band, there was no bids for Delhi, Maharashtra, NE, M.P, Assam and A.P. But telcos bid for Mumbai, H.P, Orissa and Punjab circles.

In 2100 MHz band, telcos bid aggressively in Maharashtra, M.P, Kolkata, Kerala and Karnataka on day five. Karnataka had witnessed aggressive bidding on the fourth day of auction.

On Saturday, the fourth day of spectrum auction, the bidding was robust in the 900 MHz band, while spillover was witnessed in all other three bands of spectrum. Telecom companies aggressively bid for airwaves, especially in the 900 MHz band, on Saturday, adding Rs 9,000 crore on the fourth day of the spectrum auction, taking the total amount to Rs 86,000 crore at the end of 24 rounds of auction.

Telcos like Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications are battling with each other to win back their current airwaves holding in 900 MHz band of spectrum to maintain their business case.

These telcos have largely managed to secure this band of spectrum – on which they largely operate – wherever these airwaves are expiring in 2015-16. However, telcos participating in the auction can at any point of auction round bid higher and challenge the telcos which have secured 900 Mhz band of spectrum. These telcos are now also looking for additional airwaves in this spectrum band.

Mobile licences for nine circles of Idea Cellular, six circles of Airtel and seven circles each of Vodafone and Reliance Telecom are coming up for renewal.

The auctions are most crucial for the Aditya Birla Group’s Idea Cellular as its nine circles, where licences are up for renewal contribute around 79% to its total revenue. Subscriber-wise they account for 70% of its total user base.

The auctions this time – it is the fourth since 2010 – is the biggest since four bands of spectrum in 800, 900, 1800 and 2100 Mhz are on offer.

Overall, there are 29 licences in 18 service areas which will expire in 2015-16. These licences hold 184 MHz spectrum in the 900 MHz band and 34.2 MHz in 1,800 MHz band.

Though the auctions began on Wednesday there’s a cloud over its outcome as the Supreme Court has asked the government to declare the results only after its nod. The next hearing on the matter is on March 26 so the government cannot announce the results of the auctions before it and the operators cannot claim equity based on its results.

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