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Spectrum auction February 2014: 17 rounds completed on day three, bidding continues

Spectrum auction February 2014: 17 rounds completed on day three, bidding continues

By Press Trust of India | Updated: 5 February 2014 20:37 IST

The spectrum auction February 2014 continued to witness aggressive bidding even after completion of seventeen rounds on Wednesday, with demands for both bands of airwaves on offer continuing to pour in.

The spectrum auction took off from about Rs. 45,000 crores revenue mark yesterday.

"The auction of spectrum in the 1800MHz and 900MHz band that began on 3 February 2014 has completed seventeen rounds. Auction recommenced with the 15th round today at 9 AM. Bidding is ongoing," an official statement said on Wednesday.

The ongoing spectrum auction has surpassed November 2012 and March 2013 auctions both in terms of revenue and duration.

Out of the five online spectrum auctions, the present auction is largest in terms of quantum of airwaves placed put for sale and third longest till date in terms of duration.

Eight companies - Reliance Jio Infocomm, Vodafone, Airtel, Aircel, Tata Teleservices, Idea Cellular, Telewings (Uninor) and Reliance Communications - are in fray for spectrum that they will have the right to use for 20 years.

The 3G auction in 2010 lasted for 34 days, the broadband wireless airwave auction in 2010 ended in 16 days, while the 2G auction in November 2012 ended in two days, and CDMA auction in March 2013 concluded the same day.

Government has put about 385MHz of spectrum up for auction in the 1800MHz band, most of which was freed from cancellation of 122 licences by Supreme Court in 2012.

(Also see : Spectrum auction in progress, government expecting Rs. 11,300 crore)

The apex court had directed the government to put all spectrum thus freed. However, there was minimal demand seen for this 2G spectrum. Aggressive bidding is being witnessed in 900MHz band in three metros - Delhi, Mumbai and Kolkata where a total of 46MHz of airwaves had been put up for auction.

The spectrum in 900MHz band put for auction is held by Vodafone, Airtel and Loop. While Loop Mobile is not participating in auction, it is a must win situation for Vodafone and Airtel in auction to retain their airwaves.

A new entrant, Mukesh Ambani-led Reliance Jio Infocomm, is also competing for these airwaves.

Mobile signals transmitted in 900MHz band supposedly give almost double coverage than those transmitted in the 1800MHz band.

On the second day of auction, the government received bids worth Rs. 25,500 crore for 251MHz of spectrum in 1800MHz band (2G). Bids for about Rs 19,000 crore -- 42 percent of total bid value -- was received for just 46MHz of spectrum 900MHz band.

Even if bidders opt to pay the final auction price in instalments, the government will get at least Rs. 11,790 crores as per data based on second day figures, exceeding the target of Rs. 11,343 crores in upfront payments.

The budget for 2013-14 set a total target of Rs. 40,874 crores from spectrum revenue in this fiscal and a bumper collection for airwaves auction would help the government help to keep fiscal deficit under control.

The country's fiscal deficit at Rs 5.16 lakh crores has already crossed 95 percent of budget target in the first nine months of 2013-14.

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Further reading: 2G, 3G, 4G, Auction, Bidding, CDMA, DoT, GSM, India, Network, Operators, Spectrum, Spectrum auction, TRAI, Telecom, Tower, Towers