Telecom Spectrum Auction Sees Rs. 4,000 Crore Fall in Highest Bids

Commitments totalling Rs.105,000 crore were received from telecom operators at the end of bidding on Friday, the 15th day of radio frequency spectrum e-auctions, but there was a drop of Rs.4,000 crore in the collective value of the highest bids across bands from Rs.109,000 crore a day earlier.

"The bidding is taking place in all bands. Brisk bidding was seen on 15th day of bidding, with activity requirement set at 100 percent. There is robust bidding going on in 1800 MHz, 900 MHz and 800 MHz bands," the Department of Telecom (DoT) said in a statement here.

Six fresh rounds of bidding were seen on Day 15.

"At the end of 92nd round, about 88 percent of the spectrum has been provisionally allocated to bidders. The provisional amount committed by bidders at the end of 92nd round is over Rs.105,000 crore," it said.

"Majority of service areas are going at a premium over reserve price. The competitive bidding is expected to continue. There is still spectrum, which is yet to be sold. Bidding would recommence tomorrow, that is, March 21, 2015 at 9 a.m," the statement added.

The statement, however, did not elaborate the reason behind contraction in commitment value by the bidders.

Day 14 on Thursday saw Rs.109,000 crore-worth commitments from telecom operators at the end of bidding after 86 rounds.

The central government has budgeted for Rs.43,161.72 crore from e-auctions of spectrum for the current fiscal while the reserve price for the entire spectrum on offer in the four bands, across India, was around Rs.80,000 crore.

The bids so far have well exceeded these numbers.

The maximum bids of 102 were received for Rajasthan circle with a winning amount of Rs.96.07 crore per block in the 900 MHz band. This circle saw 40 extra bids.

The second highest bids of 85 were received for Tamil Nadu circle with a winning amount of Rs.45 crore per block in the 1800 MHz band. However, this circle saw 10 less bids.

The eight telecom service providers participating in the auctions are Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone India, Tata Teleservices, Uninor, Idea Cellular and Aircel.

They have submitted earnest money of Rs.20,435 crore, which is two and a half times what had been called for.

The total spectrum put up for auction is 103.75 MHz in 800 MHz band, 177.8 MHz in 900 MHz band and 99.2 MHz in 1,800 MHz band for second generation (2G) telephony.

The government has also put up 5 MHz in the 2,100 MHz band for third generation (3G) telephony.

A reserve price of Rs.3,423 crore per MHz was fixed for 800 MHz frequency, Rs.3,399 crore for 900 MHz band and Rs.1,425 crore for the 1,800 MHz band. The government also fixed a reserve price of Rs.3,511 crore per megahertz for the frequency for 3G spectrum.