Vodafone, Reliance Communications to skip some circles in spectrum auction

Vodafone, Reliance Communications to skip some circles in spectrum auction
Vodafone and Reliance Communications are learnt not to have applied for buying spectrum in some service areas, indicating the firms have opted out of these circles.

According a source, the Department of Telecom, during screening of applications for spectrum auctions starting February 3, has not found documents of Vodafone needed to buy airwaves in seven service areas.

(Also see: Eight telecom operators apply for February 3 spectrum auction)

"Vodafone's required documents were not found for seven service areas in B and C category. Hence, the company will not be able to bid for airwaves in these areas," the source said.

Another source said Vodafone has not applied for service areas which are Assam, Bihar, Jammu and Kashmir, Madhya Pradesh, Himachal Pradesh, Odisha and North East.

Vodafone had acquired spectrum in these areas during November 2012 auctions.

Vodafone's permits in Delhi, Mumbai and Kolkata circles, which hold 900 Mhz band frequencies, are expiring in the last quarter of this year. The company will need to bid aggressively to retain these airwaves as Mukesh Ambani led Reliance Jio Infocomm too has applied to bid for these airwaves.

(Also see: Vodafone seeks licence extension for Delhi, Mumbai and Kolkata)

Meanwhile, the DoT has found that RCom has not submitted documents to bid for airwaves in 8 circles which include areas its subsidiary Reliance Telecom Ltd (RTL) holds GSM licences.

These eight circles are Assam, North East, West Bengal, Kolkata, Bihar, Odisha, Himachal Pradesh and Madhya Pradesh. In six of these circles, RCom has overlapping licences with RTL.

No immediate comments were received from the companies.

Vodafone has submitted bank guarantee of about Rs. 2,800 crore, the second highest, to bid for airwaves while RCom is learnt to have deposited about Rs. 200 crore.

(Also see: Vodafone offers Rs. 4,000 crore for retaining 2G spectrum in three circles)

The bank guarantees indicate the amount of spectrum that the companies will bid for.

About 403 megahertz of 2G spectrum in the 1800 MHz band and 46 MHz of spectrum in the premium 900 MHz band is being put up for auction.

Overall, the government has set a revenue target of Rs. 40,874.50 crore which includes Rs. 11,343 crore upfront from auctions in this fiscal.

A new player needs to submit a minimum bank guarantee of Rs. 1,918.75 crore if it plans to bid for pan-India spectrum in the 1800 MHz band.

For the scarce 900 MHz band, companies are required to deposit Rs. 438.75 crore as minimum earnest money if they want to bid in all three metros - Delhi, Mumbai and Kolkata.

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