Spectrum Auction Over, Govt Gets Rs 61K cr

spectrum-auctionThe spectrum auction in the 1800 MHz and 900 MHz band that began on 3rd February 2014 has finally completed on the tenth day i.e. February 13, 2014.

India received bids worth about Rs 61,161 crore for 22 circles of 1800 MHz and 3 circles of 900 MHz.

“We are glad that the auctions are over and we feel that the government has emerged as the real winner. While the industry is relieved at the conclusion of the auctions, there also lies disappointment at the winning price points. We are awaiting the details of the results with the list of the winners, which will determine the emerging competitive landscape going ahead,” said Rajan S Mathews, director general, COAI commenting on the auction.

“Also, in order to help the industry overcome this huge financial burden, the government should address the high tax/levy structure on the industry. We would urge the government to reduce the SUC and the USOF levy to 1 percent to provide some relief to the telcos,” added Mathews.

The validity period of the spectrum in 1800 MHz and 900 MHz band won in these auctions shall be 20 years from the ‘Effective Date’. There will be no additional rollout obligations in respect of metro service areas for licensees which are due to expire in 2014. However, for other new entrants, the rollout obligations for coverage shall be same as prescribed in unified license for metro service areas.

For new operators, the rollout obligations for 900 MHz and 1800 MHz is in 5 phases. In phase 1, the operators need to cover 10 percent DHQs/towns, phase 2 operator will cover 50 percent DHQs/towns, phase 3 operators need to cover 10 percent of BHQs, Phase 4 operators need to cover additional 10 percent BHQs (cumulative 20 percent BHQs) and Phase 5 operators need to cover additional 10 percent BHQs (cumulative 30 percent BHQs).

For spectrum auction, the winning operators needs to pay an upfront payment of 33 percent in the case of 1800 MHz band and 25 percent in case of 900 MHz of the final bid amount shall be made within 10 days of declaration of successful bidders and final price. There shall be a moratorium of 2 years for payment of balance amount of one time charges for the spectrum, which shall be recovered in 10 equal annual installments.

Winning Price Paid By Operators Per Block

      Reserve Price Winning Price Per
Circle Band No of Blocks Per Block (Rs cr) Block (Rs cr)
Andhra Pradesh 1800 113 32.6 32.6
Assam 1800 57 1.4 7.22
Bihar 1800 21 7.4 8.62
Delhi 1800 114 43.8 72.8
Gujarat 1800 60 28.6 47.56
Haryana 1800 82 5.4 5.4
Himachal Pradesh 1800 102 1.2 1.2
Jammu & Kashmir 1800 31 1 1.22
Karnataka 1800 123 31 31
Kerala 1800 140 10.4 10.4
Kolkata 1800 134 14.6 14.6
Madhya Pradesh 1800 96 8.6 10.08
Maharashtra 1800 70 34.6 58.07
Mumbai 1800 126 41.4 54.4
North East 1800 134 1.4 1.4
Orissa 1800 140 3.2 3.2
Punjab 1800 92 10.8 10.8
Rajasthan 1800 104 5.2 5.2
TamilNadu 1800 151 41.6 41.6
UP (E) 1800 49 12.2 12.8
UP (W) 1800 12 12.4 18.99
West Bengal 1800 65 4.2 4.92
Delhi 900 16 360 740.96
Kolkata 900 14 125 194.63
Mumbai 900 16 328 563.09

The number highlighted shows that the winning price is higher than the reserve price for 1800 MHz circles like: Assam, Bihar, Delhi, Gujarat, Jammu & Kashmir, UP (E), UP (W) and West Bengal. For all 900 MHz circles, the winning price is higher than reserve price and the premium is also higher than 1800 MHz. 

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