Spectrum Auction Day 3: Govt Mops Rs 77k Cr, Could End With Rs One Lakh Cr

spectrum-auction-spectrum-2015In what is turning out to the biggest spectrum auction in the country, the government is assured of mopping up more than Rs 77,000 crore from the bids on Day 3.

Day 3 saw maximum gain of Rs 12,000 crore whereas on Day 2 the gain was only Rs 5,000 crore. At the end of the first day, the estimated bids stood at Rs 60,000 crore and the second day it stood at Rs 65,000 crore.

The government is expecting around Rs 82,000 crore from the spectrum auction but seeing the way the bidding took off on the first day, it is expected to reach much higher. Experts in the industry believe the final outflow of money from the operators could go beyond Rs one lakh crore.

The 3rd day of the spectrum auction saw 6 rounds of bidding with bids in all four bands. Till date around 17 rounds of bidding has taken place in the recent auction.

The auction for airwaves in four bands – 900 MHz, 1800 MHz, 2100 MHz and 800 MHz- started on Wednesday, 4th of March, with all the big players like Airtel, Vodafone, Idea and Reliance Jio in the fray.

Top 5 Bids* (in Rs Cr)
1. Tamil Nadu (2100 MHz) – 1,720
2. Maharashtra (2100 MHz) – 1,505
3. Gujarat (2100 MHz) – 1,290
4. Kerala (2100 MHz) – 588.57
5. Kolkata (2100 MHz) – 577.97
* Provisional Winning Price per Block

Besides 900 MHz band, the maximum traction was witnessed in the 800 MHz spectrum band. This is little surprising as there was no takers except Sistema for the same band in the last auction that happened in March 2013, despite the reserve price set at half the current base price.

The spectrum auction is set for aggressive bidding this time as licenses of all top telecom operators are going to expire this year. Bharti Airtel’s licences in six circles, Vodafone India in seven circles, Idea Cellular in nine and Reliance Communications in seven circles are coming for renewal in 2015-16.

If all operators were to renew their existing spectrum, the cash outflow will be 22-28 percent above the reserve prices.

To participate in the spectrum auction, the operators have deposited an earnest money of Rs 20,435 crore. The other operators who are participating in the auction are Aircel, Tata Teleservices and Uninor. A total of 380.75 MHz of spectrum is on offer in 900 MHz band, 1,800 MHz and 800 MHz while 5MHz is up for bidding in the 2,100 MHz band across 17 out of 22 telecom areas or circles in the country.

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