The much-hyped spectrum auction crawled on the third day Tuesday, adding Rs 4,097 crore of bids to take total commitments to Rs 60,969 crore but over 60 per cent of the airwaves remained unsold as premium 4G bands found no takers. The debt-ridden telecom players stayed away from high-cost 700 Mhz and 900 Mhz bands even on the third day of bidding.
“Bids worth Rs 60,969 crore have come for around 900 Mhz of spectrum out of 2,354.55 Mhz put for auction at the end of 17th round. The auction will resume tomorrow,” sources said, adding that, there is no demand yet for frequencies in 700 MHz and 900 MHz bands while bidding interest continues to be largely around 1800 MHz and 2300 MHz that can be used by operators to provide 4G services.
The second day of the auction had also seen a tepid response from bidders with additional bids of just Rs 3,341 crore to take the total commitments to Rs 56,872 crore. Yesterday, the bidding had closed with a cumulative 11 rounds. As much as 2,354.55 MHz of frequencies valued at Rs 5.63 lakh crore at base price have been put up for auction across seven bands.
The finance ministry in the Budget pegged the revenue target at Rs 98,995 crore from the telecom space. This included Rs 64,000 crore from the auction.
The premium 700 MHz band alone has the potential to fetch bids worth over Rs 4 lakh crore if the entire spectrum in this band is sold at the base price. However, at a reserve or base price of Rs 11,485 crore per MHz, it is considered to be priced very expensive in spite of its inherent advantages in terms of propagation ability and potential savings.
Seven telecom companies — Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio, Aircel, Reliance Communications and Tata Teleservices — are in the fray for acquiring 3G and 4G airwaves that are going to be crucial for maintaining competitive edge in the market and offering next generation services in the world’s second-largest telecom market.