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RCom,Bharti,Idea win key 3G spectrum

Anil Ambani emerged the winner,while the auction generated Rs 67,710 crore for govt.

The auction for 3G mobile licence closed today,leaving Finance Minister Pranab Mukherjee with Rs 67,710 crore (around USD 15 billion) — twice the revenue he expected to raise.

The pan-India bid for third generation spectrum stood at Rs 16,750.58 crore and Anil Ambani-led RCom bagged the highest number of 13 circles,followed by Bharti in 12,Idea in 11 and Vodafone and Tatas in nine circles each,according to the Department of Telecom (DoT).

Key circles Mumbai and Delhi went to Bharti,Vodafone and RCom. Delhi spectrum went for Rs 3,316.93 crore,while that the bid for Mumbai closed at Rs 3,247.07 crore on the 34th day of auction.

No single player could bag pan-India licence for 3G mobile services.

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The government had estimated raising Rs 35,000 crore from sale of spectrum for 3G as well as Broadband Wireless access (BWA) put together.

But with auction for BWA spectrum yet to begin,the revenue mop up could go up further.

Besides Delhi and Mumbai,Bharti has got 3G spectrum in Andhra Pradesh,Karnataka,Tamil Nadu,UP (West),Rajasthan,West Bengal,Himachal Pradesh,Bihar,Assam,North East and Jammu and Kashmir.

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Bharti,however,lost out in Punjab,from where company promoter Sunil Mittal hails.

RCom would be able to offer 3G mobile services in Rajasthan,Madhya Pradesh,West Bengal,Himachal Pradesh,Bihar,Orissa,Assam,Kolkata,Punjab,North East and Jammu and Kashmir,other than Delhi and Mumbai.

Vodafone-Essar has succeeded in Maharashtra,Gujarat,West Bengal,Tamil Nadu,Kolkata,Haryana,UP (East). Vodafone also bagged Delhi and Mumbai.

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Tatas,who have been denied 2G spectrum in Delhi,also lost out on 3G spectrum in Delhi. They,however,managed to get a slot in Maharashtra,Gujarat,UP (West),Rajasthan,Karnataka,Kerala,Punjab and Haryana.

Similarly,Idea Cellular got spectrum in 11 circles including Maharashtra,Gujarat,Andhra Pradesh,Punjab,Haryana and UP (East),among others.

New operators Etisalat and Videocon have failed to get spectrum in even one cirlce,while Aircel and S Tel have bagged a few service areas.

ANALYST VIEW

ARUN KEJRIWAL,STRATEGIST,KRIS RESEARCH,MUMBAI

Its good news for the government,no doubt. The concern would be if all the money will actually come in. For the operators it’s a large sum of money that has to be paid out. We have to see how these services are priced and received by the subscribers and how it will impact their profitability.

PARESH NAYAR,HEAD OF FOREIGN EXCHANGE AND MONEY MARKETS,FIRST RAND BANK,MUMBAI

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The (bond) market has discounted that the 3G inflows would be larger than what was expected. The 3G auction results demonstrate that the government borrowing will sail through smoothly and there won’t be much of stress.

ROMAL SHETTY,DIRECTOR AT CONSULTANCY KP BANGALORE

The risk is in terms of straining of balance sheets. 3G is not going to take off in the next one or two years.

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EBITDAs will definitely come down in the next few years. For the next three years it will be difficult for all Indian telecos.

But from the companies’ point of view,the next tranche of spectrum might come only 3-5 years later so they may as well get first-mover advantage.

MANESH PATEL,PARTNER,ERNST & YOUNG,MUMBAI:

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The fact that most of the companies have not gone and done a blanket bidding (for all circles) and no single company has emerged as a winner for all circles,clearly shows that each operator has invested in circles were they are incumbents and have strong presence. This will enable the companies to monetise the spectrum in the long run.

BACKGROUND:

— The government was selling four sets of national licences — three from the auction and one to state-run telecoms firms which would have to match the highest bid price paid by the private operators — plus some extra licences per zone.

— The 3G auction will be followed by an auction for wireless broadband spectrum,for which 11 firms are vying for two national licences for private operators,with one slot reserved for state telecoms firms.

— India is a late adapter of 3G and is the biggest economy not to offer such premium services on a wide scale,although the state-run telecoms firms have 3G services in some zones.

First published on: 19-05-2010 at 16:39 IST
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