Telecom spectrum auction sees small fall in highest bids

New Delhi: After 37 rounds of bidding for telecom spectrum, there was a small drop in the collective value of the highest bids across bands to Rs.92,200 crore on Tuesday from Rs.94,000 crore a day earlier, as stakeholders switched their preferred frequencies.

"There was activity in two new service areas in 1,800 MHz band. There is a shift in activity from 2,100 MHz and 900 MHz bands to 1,800 MHz and 800 MHz bands," a senior official said.

The official further explained that the norms allow a bidding company to forego its bid for a particular band made earlier to a new band if it is seen that such a switch would prove beneficial, financially and in terms of spectrum management. Hence the small drop.

The official said there was still some spectrum up for grabs and that the bidding will re-commence on Wednesday at 9 a.m.

"The auction of spectrum in 2,100 MHz, 1,800 MHz, 900 MHz and 800 MHz Bands re-commenced today (Tuesday) at 9 a.m. and today six rounds of bidding were completed. Till now, 37 rounds of bidding has taken place," an internal note said.

"At present, over 83 percent spectrum has been provisionally allocated to bidders at a value of approximately Rs.92,200 crore," the note added.

"Majority of the service areas are going at a premium over the reserve price. With 100 percent activity requirement and activity in new service areas, the competitive bidding is expected to continue."

The Tamil Nadu circle attracted the highest bid of Rs.1,720 per block in the 2,100 MHz band, followed by Karnataka at Rs.1,642.36 crore per block in the same band.

The maximum bids of 98 were received for Kolkata circle with a winning amount of Rs.18.62 crore per block in the 1800 MHz band. This circle saw 63 extra bids.

The government is offering in this e-auction a total of 103.75 MHz in the 800 MHz band over 85 blocks, 177.8 MHz in the 900 MHz band over 889 blocks, 99.2 MHz in 1,800 MHz band over 496 blocks and 5 MHz in the 2,100 MHz band over 17 blocks.

Eight companies are in the fray -- Vodafone, Bharti, Idea, Telewings, Aircel, Tata Tele, Reliance Communications and Reliance Jio. The auction is crucial for some of them as their 20-year licence term draws to a close in December.

The commitment for telecom spectrum comes over and above the Rs.200,000 crore that India Inc has already bid under two phases of auctions for award of coal blocks. But the proceeds from the auction of coal blocks will go to the respective state governments over 30 years.

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 four bands, across India, was around Rs.80,000 crore.