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Idea Cellular Top Bidder in Spectrum Auction: Telecom Minister

Idea Cellular Top Bidder in Spectrum Auction: Telecom Minister

By Indo-Asian News Service | Updated: 26 March 2015 18:55 IST

Idea Cellular emerged as the top bidder in the latest round of auctions for telecom spectrum with a total commitment of Rs. 30,306 crores, the government announced on Thursday after the Supreme Court relaxed its earlier order restraining finalisation of bids - albeit with a caveat.

Communications Minister Ravi Shankar Prasad, who revealed the finer details of the auction process, said he was hoping for Rs. 28,872 crores upfront - out of the total commitments worth Rs. 109,874 crores - to flow in by end-March, with a gentle nudge to the seven successful companies.

The victorious bidders will pay a quarter to a third of the winning price within 10 days, and the rest in 10 annual instalments beginning 2017.

The Supreme Court bench of Justice Dipak Misra and Justice Prafulla C. Pant paved the way for the announcement, but said the actual award of the airwaves should await a further order on the matter, since it was still in the process of hearing the petitions filed in this regard.

The minister also sought to allay fears that the high cost of spectrum due to the latest round will not impact on the tariff. He said detailed analysis by the ministry suggested that telecom tariff could go up only marginally by around Rs. 0.013 per minute.

The details of the winning bids were revealed after the Supreme Court, which is hearing a host of petitions on the issue of spectrum, allowed the government on Thursday to go ahead and finalise the bids and name the winners - but take a decision only after its order on that matter.

The Mukesh Ambani-led Reliance Jio, which was expected to bid aggressively for the spectrum to start 4G services in the country, made a total commitment of Rs. 10,077 crores.

Bharti Airtel committed the second-highest amount of Rs. 29,310 crores behind Idea Cellular.

"Even in terms of the quantum of spectrum sold, I'm happy to say, it was the highest in 2015," Prasad said. He said that against 88.8 percent that the latest tranche is expected to fetch, it was 43.04 percent in 2012, 17.78 percent in 2013 and 81.9 percent in 2014.

Among the other players out of eight that qualified, Vodafone bid Rs. 25,959 crores, Tata Teleservices bid Rs. 7,851 crores, and Reliance Communications bid Rs. 4,299 crores. Uninor, however, did not win any spectrum.

In the Supreme Court, Justice Misra and Justice Pant in their order on the matter said: "We are inclined to modify our order, and allow the Union of India to finalise auction and proceed further."

All the successful bidders shall be intimated that the auction will be finalised subject to the outcome of the hearing of the matter by the court, the order said, relaxing its earlier verdict of February 26 restraining the government from finalising the bids.

Attorney General Mukul Rohatgi said the auction was a tremendous success and made a plea to the court to modify its earlier order so that the government can then ask the successful bidders to make their respective initial payments totalling Rs. 28,872 crores, which has been factored into the budget.

The numbers revealed by the communications minister suggest that the latest tranche of auction - spread over 19 days with 115 rounds of bidding - has come as a windfall for the government, surpassing the previous high of Rs. 106,200 crores that the government received in the 2010 auction, which was spread over 34 days with 183 rounds of bidding.

On offer this time were blocks for 69 service areas at a total reserve price of Rs. 80,277 crores, and the provisional allocation was announced for 63 of them at a winning price of Rs. 109,874.91 crores. In 50 service areas, the winning bids went at a premium.

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