BackSpectrum auction: Government nears Rs1 trillion on day 6
DoT data after 37 rounds of bidding show telcos continuing their focus on 900MHz and 800MHz bands
Premium(Mint)
New Delhi: The ongoing spectrum auction completed 37 rounds of bidding, giving the government an assured revenue of close to ₹ 1 trillion, data published by the department of telecommunications after the final round on the sixth day showed.
The exact amount the government is assured to get could not be ascertained.
Telecom operators bidding for spectrum continued their focus on 900MHz and 800MHz bands.
For the 900MHz band, Assam, the northeast, Punjab, Rajasthan and West Bengal continued to receive excess demand.
In the 800MHz band, there was excess demand in Madhya Pradesh, Assam and Punjab.
The 1,800MHz band saw some excess demand in Haryana and Kolkata while demand for 2,100MHz remained muted.
The fifth spectrum auction is the biggest in terms of the quantum of airwaves being sold and is also set to generate the highest revenue for the government from such an auction.
The first auction for 3G and 4G spectrum in the 2,100MHz and 2,300MHz bands in 2010 got the government more than ₹ 1.06 trillion. Bidding will resume on Wednesday.
Once the bidding for 800MHz and 900MHz spectrum ends, analysts expect the auction to conclude as there is not much demand for spectrum in the 1,800MHz band.
“More than 70% of it is spectrum that was not sold in the last auction, that the government is now trying to sell at a higher price. Much of it is also not contiguous, making the reserve price far too high for the telcos to bid for," said a Mumbai-based analyst working with a multinational brokerage firm.
The key reason for the aggressive bidding for spectrum in the 900MHz band is that the airwaves on the block are currently already being used by the telcos.
The right to use this spectrum will end later this year and the telcos are trying to ensure that they retain the airwaves, leading to the price surging by more than 75% over the reserve price.
Idea Cellular Ltd, for instance, puts at risk around 70% of its revenue, if it is not able to retain the airwaves.
The auction has eight telcos in the fray, including the Mukesh Ambani-controlled Reliance Jio Infocomm Ltd, Bharti Airtel Ltd, Vodafone India Ltd, Idea Cellular, Reliance Communications Ltd, Telewings Communications Services Pvt. Ltd (Uninor), Aircel Ltd and Tata Teleservices Ltd.
On Tuesday, shares of Bharti, Idea and Reliance Communications rose on speculation the bidding for the 900MHz spectrum had concluded with the telcos successfully retaining their spectrum. Bharti’s shares rose 7.09% to settle at ₹ 367.90 . The stock was the biggest gainer among the 30-share Sensex index. Idea Cellular gained 3.15% to ₹ 153.85, while Reliance Communications rose 2.46% to close at ₹ 64.45. The benchmark Sensex fell 0.47% to 28,709.87.
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