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Spectrum Sale: Govt Hopes to Rake in Rs 1 L Cr

Published: 06th March 2015 06:00 AM  |   Last Updated: 06th March 2015 04:16 AM   |  A+A-

NEW DELHI:  Day 2 of the country’s biggest spectrum auction ended with with eight companies making bids worth an estimated `65,000 crore in all four spectrum bands. The government hopes to garner `1 lakh crore from the overall spectrum auction.

According to reports, fresh five rounds of bidding took place on Thursday, after six rounds on the first day, with bids worth `60,000 crore.

Most of the spectrum being put up for the auction is presently held by Airtel, Vodafone, Idea Cellular and Reliance Telecom. Since their licences are expiring in 2015-16, these companies have to participate for renewal of their licence. Mobile licences for Idea Cellular's 9 circles, 6 circles of Airtel and 7 circles each of Vodafone and Reliance Telecom are coming up for renewal. It is mandatory for these companies to bid for spectrum if they have to continue offering mobile and other telecom services.

Spectrum.JPGThe four bands that are on auction include 800 MHz, 900 MHz, 1,800 MHz and 2,100 MHz. At the minimum or auction start price for the 2,100 MHz band, the government would garner at least `17,555 crore. The reserve price for auction of 2G spectrum in 800 MHz, 900 MHz and 1800 MHz bands will fetch the government `64,840 crore.

The Finance Ministry is also expected to have a close watch on the e-auction of spectrum as this will help the government to meet its fiscal deficit target of 4.1 per cent of GDP. 

Asian brokerage CLSA said that at the end of day one, spectrum in 900 MHz is already 32 per cent above the reserve price and there was excess demand in 5 out of 17 circles. “However, despite limited blocks on offer, 2100 MHz and 1800 MHz bands saw 1-2 per cent price increase with no bids in select key circles. 800MHz saw limited interest with price increase in only two circles.”

The operators have deposited a combined `20,000 crore as earnest money (a percentage of the spectrum base price, depending on circles). Companies get eligibility points on the basis of their earnest money deposits — the higher the deposit the higher the points for participation in the auction.

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