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Spectrum Auction 2016: Day 3 Sees Bids Rise to Rs. 60,969

Spectrum Auction 2016: Day 3 Sees Bids Rise to Rs. 60,969

By Indo-Asian News Service | Updated: 5 October 2016 12:31 IST

Highlights

No takers for 700MHz and 900MHz bands at the auction for the third day
900MHz of total spectrum has been sold so far out of a total 2,354MHz
Government allots the right to the spectrum through auction for 20 years

The government received cumulative commitments of Rs. 60,969 crore from telecom operators at the end of bidding on Day 3 of India's biggest spectrum auction on Tuesday.

While there were no takers for 700MHz and 900MHz bands at the auction for the third day running, major activity was seen in the 1,800MHz band, according to data released by the Department of Telecommunications.

(Also see: Spectrum Auction 2016: Bids Worth Rs. 53,531 Crores Placed Across Bands on Day 1)

There were six fresh rounds of bidding with the total rounds now standing at 17 after three days.

The maximum bids of 112 in the 1,800MHz band were received for the Jammu & Kashmir circle with a provisional winning amount of Rs. 2.60 crore per block. However, 48 blocks were not bid for. The second highest bids (also in same band) - 81 - were received for the Assam circle with a provisional winning amount of Rs. 8 crore per block. However, this circle also saw 18 blocks without bids.

Some hectic activity was observed in 2,300MHz, while 800MHz, 2,100MHz and 2,500MHz saw tepid response.

According to official sources, 900MHz of total spectrum has been sold so far out of a total 2,354MHz of spectrum that the government has put up for auctioning.

Day two saw over Rs. 56,792 crore cumulative commitments from telecom operators after 11 rounds of bidding.

The companies participating in the auction are Bharti Airtel, Vodafone India, Reliance Jio Infocomm, Reliance Communications, Idea Cellular, Aircel and Tata Tele - who have together furnished a total earnest money of Rs. 14,653 crore.

Surprisingly, the 700MHz band, meant predominantly for 4G (LTE) services which will support broadband data, as well as Internet Protocol telephony such as voice over LTE (Long-Term Evolution) network - measures that can bring major cost benefits to customers - went without bids.

In the Delhi circle, the reserve price for 700MHz is pegged at Rs. 1,595 crore per MHz - which is the highest - and for pan-India, it is Rs. 11,485 crore per MHz.

The airwaves on the block for telecom operators are in seven bands - 700MHz, 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz.

The auction now is central to the government realising the revenue target of Rs. 98,994.93 crore that has been provided for in the budget against 'other communications services' - the bulk of which is scheduled from the fee paid for spectrum.

The auction timings are from 9am to 7.30pm, Monday to Saturday.

For the auctions - which will be a Internet-based, online process - the government has hired the services of mjunction services.

The government allots the right to the spectrum through auction for 20 years.

The operators will have the choice of both upfront and installments payment options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25 percent upfront, and for those winning above that, the upfront payment will be 50 percent.

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