BackSpectrum auction bids cross Rs1 trillion mark after 49 rounds
So far, over 86% of the spectrum has been provisionally allocated to bidders
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New Delhi: Cumulative bids for spectrum in the ongoing auction have crossed the ₹ 1 trillion mark after 49 rounds of bidding over eight days, communications minister Ravi Shankar Prasad said on Thursday.
The government is now assured ₹ 1.02 trillion in revenue.
“There is aggressive bidding going on in all bands i.e. 2,100MHz (megahertz), 1,800MHz, 900MHz and 800MHz bands. At the end of the 49th round, over 86% of the spectrum has been provisionally allocated to bidders at a value of approximately ₹ 1,02,000 crore. Majority of service areas are going at a premium over reserve price. The competitive bidding is expected to continue," said a statement on Thursday’s auction from the government. “There is still spectrum, which is yet to be sold."
According to the data published by the department of telecommunications (DoT) of the last round of bidding, on Thursday, the auction continued to show signs that it was coming to an end, with increased bidding in the 2,100MHz and 1,800MHz bands, while demand in the more valuable 800MHz and 900MHz bands seemed to be waning. After six rounds of bidding held on Thursday, the 2,100MHz band saw excess demand in Assam, the North-East, Rajasthan and Western Uttar Pradesh circles, while 1,800MHz showed activity in the Haryana and Kolkata bands. The 900MHz band had excess demand in the North-East and West Bengal circles while 800MHz had excess demand in Madhya Pradesh, Maharashtra and Northeast circles.
“The auctions have shown that despite all noises by industry against the government on spectrum—they do end up buying spectrum at such high prices eventually," Sunil Tirumalai and Chunky Shah, analysts with Mumbai-based Credit Suisse Securities Research and Analytics, said in a Thursday report on the auction progress. “We disagree with the assumption that the additional spectrum burden will lead to an automatic increase in tariffs. History has shown that pricing power in the Indian telecom sector is elusive, and we are in fact going through a phase of voice price pressure as seen in reported numbers."
Shares of Bharti Airtel Ltd, Idea Cellular Ltd and Reliance Communications Ltd rose. Bharti Airtel gained almost 2% to ₹ 397.50, Idea Cellular 7% to ₹ 174.95 and Reliance Communications 5.19% to ₹ 69.90 on the BSE. The exchange’s benchmark Sensex rose 1% to 28,930.41 points.
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