Telecom companies jointly made bids of about Rs 52,700 crore at the end of the fourth day of the 2G spectrum auction. The amount bid in four days is now within handshaking distance of the Rs 67,000 crore collected from the 3G auctions by the government in 2010.
The eight telecom companies had apparently reached a final price for the premium 900 MHz airwaves in the metros of Delhi, Mumbai and Kolkata but demand has shifted to the workhorse band of 1800 MHz. “We are in the process of completely transforming the sector and giving back to it the confidence that it had prior to its decline in 2010… the auction is doing well from the revenue standpoint,” telecom minister Kapil Sibal said after today’s rounds closed.
Telecom Secretary MF Farooqui said the total value of the bids was Rs 52,689 crore, of which Rs 30,754 crore came for 2G spectrum in the 1800 MHz band and Rs 21,935 crore was for the premium 900 MHz band.
The minister attributed the demand to various factors, mainly the new licencing regime that allows telecom companies to provide services using any technology and rationalisation of reserve prices and spectrum usage charges, besides providing enough bandwidth for all players to compete.
Bids for the 900 MHz band in Delhi came in at Rs 639.24 crore per MHz, 78 per cent higher than the base price of Rs 360 crore fixed by government. In Mumbai, bids at Rs 563.09 crore per MHz were 72 per cent higher than the reserve price and in Kolkata they were 54 per cent higher at Rs 192.71 crore.
There was excess demand for 1800 MHz band in Assam, J&K, Madhya Pradesh, UP East and UP West service areas, because of which the auction will resume tomorrow. Demand for airwaves in the 1800 MHz band in Delhi increased as well, leading to a 5 per cent rise in the base price to Rs 230 crore per MHz.