Spectrum auction has received bids worth Rs 63,325 crore so far on the fifth day on Thursday for around 40 per cent of mobile radiowaves put up for sale.
“Bids worth about Rs 63,325 crore have been received till the end of 26th round for 960 Mhz of spectrum out of total 2,354.55 Mhz put for auction,” official sources told PTI.
The much-hyped spectrum auction had crawled on the fourth day on Wednesday and received total commitments of Rs 63,500 crore, leaving about 60 per cent of total spectrum put for auction unsold.
The amount received so far however is slightly lower than Wednesday’s closing, with officials saying that it can fluctuate or even go down because the bidding system requires existing and new operators to bid for different block sizes.
The auction process resumed at 1000 hrs with each round being 45 minutes in duration, unlike 60 minutes on the previous days. The bidding process is still on.
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 spectrum, crucial for maintaining competitive edge in the market and offering next generation services in the world’s second-largest telecom market.
The bidding activity is taking place only in few circles with interest continuing to be largely around 1800 MHz and 2300 MHz that can be used by operators to provide 4G services.
Industry has also shown interest in 2100 Mhz (3G/4G) band, 2500 Mhz (4G) band and 800 Mhz (2G/4G) bands.
However, telecom operators have stayed away from the highly priced 4G radiowaves in 700 Mhz and 900 Mhz bands.
The debt ridden telecom industry has been cautious in this auction and filling its coffer with low priced spectrum that will help them in improving mobile service quality.
As per rating agency ICRA, the consolidated debt level of the industry stood at around Rs 3,80,000 crore in December 2015 against Rs 2,90,000 crore in March 2014.
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 interms of propagation ability and potential savings.
The government has fixed a pan-India reserve price of Rs 2,873 crore per Mhz for spectrum in 1,800 MHz band; Rs 3,341 crore for 900 MHz; Rs 5,819 crore for 800 MHz; Rs 3,746 crore for 2,100 MHz; Rs 11,485 crore for 700 MHz and Rs 817 crore each for 2,300 MHz and 2,500 MHz bands.
The higher the frequency, the lower is its pricing as coverage and efficiency tapers with increase in spectrum band value.
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