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Spectrum auction could garner Rs 90,000 crore

Most of the spectrum being put up for the auction is held by Airtel, Vodafone, Idea Cellular and Reliance Telecom.

Mail Today Bureau   New Delhi     Last Updated: February 17, 2015  | 12:31 IST
Spectrum auction could garner Rs 90,000 crore
The reserve price for auction of 2G spectrum in 800 MHz, 900 MHz and 1,800 MHz bands will fetch the government Rs 64,840 crore.

Bidding in the March 4 spectrum auction could get aggressive with the participation of Reliance Jio Infocomm, Uninor, Tata Teleservices and Aircel. Total eight private telcos, including Bharti Airtel, Vodafone, Idea and RCom, submitted applications on Monday.

Sistema Shyam Teleservices, a potential buyer of CDMA spectrum, opted out citing high base price and legal issue with the Department of Telecommunications (DoT). Videocon Telecom also did not submit application. Monday was the last day for submitting applications.

Most of the spectrum being put up for the auction is held by Airtel, Vodafone, Idea Cellular and Reliance Telecom. Their licences are set to expire in 2015-16. It is mandatory for these companies to bid for spectrum if they want to continue offering mobile and other telecom services.

The government expects to garner more than Rs 80,000 crore from the sale of radio waves for providing 2G as well as 3G services going by the reserve price. It has approved the minimum, or auction start, price for the 2,100 MHz band, or 3G spectrum, which will garner, at least, Rs 17,555 crore.

The reserve price for auction of 2G spectrum in 800 MHz, 900 MHz and 1,800 MHz bands will fetch the government Rs 64,840 crore. Credit rating agency Crisil said that telcos will bid aggressively and the government could raise `90,000 crore through sale of radio waves.

"With nearly half of Rs 1,20,000 crore annual revenues at stake for large operators, the importance of the forthcoming spectrum auction can't be overstated. Telecom operators will shell out more than Rs 90,000 crore to bag airwaves (radiowaves) in the upcoming telecom auction," it said in a note.

The government plans to sell 380.75 MHz of spectrum in the three bands-the premium 900 MHz band, 1,800 MHz and 800 MHz besides 5 MHz in the 2,100 MHz band across 17 out of 22 telecom areas. The government has fixed reserve price of Rs 3,646 crore for pan-India per MHz in the 800 MHz band; Rs 3,980 crore for 900 MHz band (pan-India excluding Delhi, Mumbai, Kolkata, and J&K); Rs 2,191 crore pan-India (excluding Maharashtra and West Bengal) in the 1,800 MHz band.

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