Spectrum Auction: Govt richer by Rs 1.09 lakh crore; bidding ends today

NEW DELHI: In the biggest ever spectrum auction in the country that ended today, the government garnered Rs 1.09 lakh crore at the end of 19th day of bidding on March 25, as eight telcos showed their mettle to win maximum spectrum.

Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone India, Tata Teleservices, Uninor, Idea Cellular and Aircel participated in the auction to bid for airwaves in the 800 MHz, 900 Mhz, 1800 MHz and 2100 MHz bands, with maximum traction witnessed in 2100 MHz and 800 MHz spectrum bands.

At the end of 110 rounds of bidding, the government had received provisional bids worth over Rs 1.09 trillion ($17.5 billion), an official statement said.

The proceeds from the auction, which is more than the expectations of the government, will help to narrow the yawning fiscal deficit.

The government drew flak for fixing a higher reserve price for spectrum and the industry also claimed that it has artificially created a spectrum shortage.

It had fixed a reserve price of Rs 3,423 crore per MHz for 800 MHz frequency, Rs 3,399 crore for 900 MHz band, Rs 1,425 crore for 1,800 MHz band and Rs 3,511 crore per MHz for 3G spectrum.

A total of 380.75 MHz of spectrum was put on sale in the premium 900 MHz band, 1,800 MHz and 800 MHz, while 5 MHz was up for bidding in the 2,100 MHz band, used for 3G mobile services, across 17 out of 22 telecom.

As per rules, the bidders would pay a quarter to a third of the winning price initially and the rest by 2027. The winners of the auction would be announced by the government after March 26 when the Supreme Court is slated to issue its ruling on multiple cases with respect to auction guidelines and criteria.

The rules also say that in case of deferred payment option, telecom operators are required to pay an upfront payment of 33 per cent in case of 2100 MHz, 1800 Mhz bands and 25 per cent for 900 MHz and 800 MHz bands within 10 days of the close of auction.

The winners will pay the rest of the amount over a period of 12 years — 2 years moratorium and then 10 yearly installments.

It should be noted that Idea Cellular’s nine circles, six circles of Airtel and seven circles each of Vodafone and Reliance Communications were coming up for renewal and so these operators bid aggressively for surviving in these circles.

However, Reliance Jio, Tata Teleservices, Telewings (Uninor) and Aircel participated to buy additional spectrum.

Sistema Shyam TeleServices Ltd (SSTL), which provides CDMA services under MTS brand, had opted out of the auctions, citing high spectrum prices.

Bharti Airtel, Idea and other telcos had moved court against higher prices and conditions mentioned in the notice inviting application, which is a legal framework for spectrum auction. A move which could have stalled the auctions but the apex court ruled the continuation of the auction process.

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