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Centre mops up Rs5,000 cr on Day 2 of spectrum auction

The maximum fight is for the 900 MHz band, where Bharti Airtel, Vodafone, Idea and Reliance Communications are locked in a do-or-die battle.

By: ENS Economic Bureau | New Delhi |
March 6, 2015 1:02:15 am

Aggressive bidding, especially in the 900 MHz band, continued on the second day of the auction of spectrum with the government mopping up Rs 5,000 crore, taking the total amount to Rs 65,000 crore within the first two days of bidding. With five rounds of bidding done on day two, a total of 11 rounds was completed in the first two days.

The maximum fight is for the 900 MHz band, where the country’s top four operators — Bharti Airtel, Vodafone, Idea and Reliance Communications — are locked in a do-or-die battle as they need to win back their current spectrum holding to maintain their business case. On day two, bidding for this band was already up 45 per cent over the reserve price.

The auction this time — the fourth since 2010 — is the biggest as spectrum in the 800, 900, 1800 and 2100 MHz bands are on offer. All four bands taken together, the bids are 33-35 per cent above the reserve price.

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Mobile licences for nine circles of Idea Cellular, six circles of Airtel and seven circles each of Vodafone and Reliance Telecom are coming up for renewal. The auction is most crucial for Idea Cellular as nine circles where its licences are up for renewal contribute around 79 per cent to its total revenue. Subscriber-wise, they account for 70 per cent of its total user base.

The best placed is Bharti Airtel as it has sufficient back-up spectrum in the 1800 MHz band in the circles where its licences are up for renewal. Bharti had bought this spectrum in the February 2014 auction.

The broad trend so far is that after the 900 MHz band, the 2100 MHz (3G) band generated most interest, followed by 800 MHz and 1800 MHz. The least quantum of spectrum is available in the 1800 MHz band and much of it is not contiguous, which makes it unattractive from a business case perspective for operators.

The auction began on Wednesday but there’s a cloud over it as the Supreme Court has told the government to declare the results only after its nod. It will next hear the matter on March 26. FE

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