 "Govt revenues from spectrum sale crosses Rs 1 lakh cr")
The government’s assured revenues from telecom spectrum auction crossed Rs 1 lakh crore on Thursday, surpassing the target fixed by the government from the sale of the spectrum.
At the end of the eighth day on Thursday, the revenues stood at Rs 1,02,057 crore with 49 rounds complete.
On Wednesday, the revenues had touched Rs 96,000 crore.
The biggest ever auction of spectrum in 800-MHz, 900-MHz, 1,800-MHz, 2,100-MHz bands had started on March 4.
“It is a great assurance for us that the bid amount has crossed Rs 1 lakh crore. Want to compliment all telecom players who are participating in the auction,” Ravi Shankar Prasad, minister for communications and information technology, told reporters here on Thursday.
According to him, this shows the trust and optimism in the new government's ability and potential to take a fair decision and the inherent potential, which the telecom segment holds out for future growth.
“The bidding has taken place in all bands. Brisk bidding was seen on the eighth day with activity requirement set at 100 per cent. At the end of 49th round, 86 per cent of the spectrum was provisionally allocated to bidders at a value of Rs 1,02,057 crore. Majority of service areas are going at a premium over reserve price. There is still spectrum, which is yet to be sold,” the Department of Telecommunications (DoT) stated.
The auction is expected to conclude early next week.
In a note, Morgan Stanley said assuming the current auctions settle at Rs 1,18,500 crore and adding Rs 61,100 crore for the earlier auction, the interest and depreciation cost would be Rs 27,700 crore for the telecom sector. “Operators would need a raise in tariffs of about five paise or 15 per cent to neutralise impact on profits. The spectrum is valid for 20 years and hence, there is a lot more certainty from a business continuity perspective. Data growth is happening at a robust pace, which should aid overall revenue growth for the operators.”
The ongoing auction is crucial for many existing telecom players. The licences of Idea Cellular (nine circles), Bharti Airtel (six circles) and Vodafone and Reliance Telecom (seven circles each) are due for renewal in 2015-16.
Overall, 29 licences in 18 service areas are due for renewal in 2015-16. These licences hold 184 MHz of spectrum in the 900-MHz band and 34.2 MHz in the 1,800-MHz band.
Bihar, Himachal Pradesh, Uttar Pradesh (west) Gujarat, Odisha and Kerala circles are ‘must-wins’ for some telcos, with prices going up as much as 100 per cent.
Through the auction, the government is selling 380.75 MHz of spectrum in the 800-MHz, 900-MHz and 1,800-MHz bands, and five MHz in the 2,100-MHz band across 17 of the 22 circles. The government had estimated the auction would generate Rs 80,000-1 lakh crore from the sale of spectrum in 800, 900, 1,800 and 2,100-MHz bands.
Till now, the most aggressive bidding has been in the 900-MHz band, which is used for offering voice services. According to new norms, this band can also be used for third generation mobile services. The highest revenue for the government is also expected to come from this band.
DoT will not be able to announce the final results of the auction because of a Supreme Court order barring it from doing so without permission. A hearing in the apex court in this regard is scheduled for March 26.
At the end of the eighth day on Thursday, the revenues stood at Rs 1,02,057 crore with 49 rounds complete.
On Wednesday, the revenues had touched Rs 96,000 crore.
The biggest ever auction of spectrum in 800-MHz, 900-MHz, 1,800-MHz, 2,100-MHz bands had started on March 4.
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“It is a great assurance for us that the bid amount has crossed Rs 1 lakh crore. Want to compliment all telecom players who are participating in the auction,” Ravi Shankar Prasad, minister for communications and information technology, told reporters here on Thursday.
According to him, this shows the trust and optimism in the new government's ability and potential to take a fair decision and the inherent potential, which the telecom segment holds out for future growth.
“The bidding has taken place in all bands. Brisk bidding was seen on the eighth day with activity requirement set at 100 per cent. At the end of 49th round, 86 per cent of the spectrum was provisionally allocated to bidders at a value of Rs 1,02,057 crore. Majority of service areas are going at a premium over reserve price. There is still spectrum, which is yet to be sold,” the Department of Telecommunications (DoT) stated.
The auction is expected to conclude early next week.
In a note, Morgan Stanley said assuming the current auctions settle at Rs 1,18,500 crore and adding Rs 61,100 crore for the earlier auction, the interest and depreciation cost would be Rs 27,700 crore for the telecom sector. “Operators would need a raise in tariffs of about five paise or 15 per cent to neutralise impact on profits. The spectrum is valid for 20 years and hence, there is a lot more certainty from a business continuity perspective. Data growth is happening at a robust pace, which should aid overall revenue growth for the operators.”
The ongoing auction is crucial for many existing telecom players. The licences of Idea Cellular (nine circles), Bharti Airtel (six circles) and Vodafone and Reliance Telecom (seven circles each) are due for renewal in 2015-16.
Overall, 29 licences in 18 service areas are due for renewal in 2015-16. These licences hold 184 MHz of spectrum in the 900-MHz band and 34.2 MHz in the 1,800-MHz band.
Bihar, Himachal Pradesh, Uttar Pradesh (west) Gujarat, Odisha and Kerala circles are ‘must-wins’ for some telcos, with prices going up as much as 100 per cent.
Through the auction, the government is selling 380.75 MHz of spectrum in the 800-MHz, 900-MHz and 1,800-MHz bands, and five MHz in the 2,100-MHz band across 17 of the 22 circles. The government had estimated the auction would generate Rs 80,000-1 lakh crore from the sale of spectrum in 800, 900, 1,800 and 2,100-MHz bands.
Till now, the most aggressive bidding has been in the 900-MHz band, which is used for offering voice services. According to new norms, this band can also be used for third generation mobile services. The highest revenue for the government is also expected to come from this band.
DoT will not be able to announce the final results of the auction because of a Supreme Court order barring it from doing so without permission. A hearing in the apex court in this regard is scheduled for March 26.