Telecom spectrum bid: Rs 77,000 crore committed by end of round three

NEW DELHI: A total telecom spectrum of Rs 77,000 crore (provisional figure) was reached by the end of the week with 17 rounds.


Eight telecom operators — Reliance Communications, Reliance Jio Infocomm, Bharti Airtel, Vodafone India, Tata Teleservices, Uninor, Idea Cellular and Aircel attended the six fresh rounds of bidding. 


On day one, bids value was Rs 60,000 crore, while day two bids value reached Rs 65,000 crore. The bids were held for spectrum in 2100 MHz, 1800 MHz, 900 MHz and 800 MHz bands.  


The bidding has taken place in all bands, according to the Communications and Information Technology Ministry. There is still some spectrum available and auction will continue for this. 


The reserve price value was around Rs 49,000 crores of provisionally won spectrum.


The estimated revenue from the auction of spectrum is targetted at Rs 64,840 crore (excluding 2100 MHz spectrum) of which Rs 16,000 crore is expected to be realized in the current financial year.


The reserve price approved is Rs 3646 crore pan-India per MHZ in 800 MHz, Rs 3980 crore for 900 MHz band pan India excluding Delhi, Mumbai, Kolkatta, and Jammu and Kashmir; Rs 2191 crore pan India (excluding Maharashtra and West Bengal) in 1800 MHz band. 


A meeting of the Union Cabinet chaired by Prime Minister Narendra Modi had, early in January, approved the proposal of the Department of Telecom to proceed with auction in 800, 900 and 1800 MHz bands. 


The quantum of spectrum to be put to auction was 103.75 MHz in 800 MHz band in all service areas, 177.8 MHz  in 17 LSAs in 900 MHz band and 99.2 MHz in 15 LSAs in 1800 MHz band. Thus a total of 380.75 MHz in 800, 900 and 1800 MHz was being put to auction.  


Payment terms, eligibility criteria and auction objectives shall be as in the previous auction of February 2014. 


The Cabinet had also decided that intent to put 2100 MHz to simultaneous auction may be announced along with auction of other bands. Details of this will be announced later on.


Later that month on 15 January, the Telecom Regulatory Authority of India opined that clubbing the 2100 MHz band spectrum with the spectrum of other bands for auction in February will be defeated if sufficient spectrum is not made available in the 2100 MHz band.


“A split auction of 2100 MHz (one in February 2015 and remaining say, in December 2015 after availability from Defence Ministry) will artificially increase the market price of 2100 MHz in February because of the severe supply constraint. The 15 MHz of spectrum in the 2100 MHz spectrum being vacated by the Defence Ministry should be auctioned in view of the in-principle agreement reached with MoD, even if it is not available immediately,” TRAI had said. 


The Authority reiterated that in the auction of 2100 MHz band spectrum, an auction-specific cap should be placed that no bidder would be permitted to bid for more than two blocks in a local service area if three to four blocks are available in that local service area. 


TRAI had said there was no change in the reserve prices for spectrum in the 2100 MHz bands from what were recommended earlier.


It said the Department of Telecom is responsible to ensure that the spectrum being auctioned is either interference free or to share information upfront about the areas where interference is likely to occur so that the telecom service providers participating in the auction can take informed decision.


These views were given to the DoT in Clarifications/Reconsideration of Recommendations on 'Valuation and Reserve Price of Spectrum: 2100 MHz Band'.

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