Spectrum auction Day 9: Govt earning crosses Rs 61,000 cr

Telcos only bid for 1800MHz band; Assam most sought after circle where spectrum price has jumped a massive 400%

With aggressive bidding for spectrum in a few select circles for the 1800MHz band, the Government has secured more than Rs 61,000 crore at the end of the ninth day of the auction.

Telecom companies have already stopped bidding for the 900MHz spectrum after Monday.

If the spectrum is sold at Tuesday’s provisional winning price, the Government’s earning would be about 61 per cent higher than the value of entire spectrum being auctioned at reserve price (Rs 37,903 crore). The Government has already secured more than what it had earned from the 3G auction in 2010 by selling 20MHz of radiowave for Rs 50,968 crore.

Assam is the most sought after circle where spectrum price has jumped a massive 396.42 per cent as compared with the original reserve price. Nine more circles where prices have increased are Maharashtra (67.8 per cent), Delhi (66.2 per cent), Gujrat (66.2 per cent), UP-west (53.1 per cent), Mumbai (31.4 per cent), Madhya Pradesh (17.2 per cent), West Bengal (17.1 per cent),  Bihar (16.4 per cent), UP-east (4.9 per cent) as compared with the original reserve price that the Government had set.

At the end of the ninth day, there was excess demand only in Assam and Madhya Pradesh circles.

According to the Budget target of the Government, it hopes to earn Rs 11,343 crore from the spectrum auction this year. As companies have the option to pay in instalments, they will have to pay 25 per cent of the total bid amount for 900MHz band and 33 per cent of the total bid amount in 1800MHz band.

Based on Tuesday’s provisional winning price, the Government will get about Rs 18,500 crore for the current year from the ongoing spectrum auction.

Just selling the 46MHz of spectrum in the 900MHz band, the Government would earn Rs 23,590 crore at the provisional winning price of at the end of the eighth day of auction.

According to market analysts, the battle has shifted to 1800MHz band as incumbent operators now have more clarity on how much spectrum they would get in 900MHz band. Bharti Airtel and Vodafone will have to buy spectrum in 1800MHz band in the circles where they already have 900MHz spectrum, if they fail to retain their existing holding. However, the entry of Reliance Jio and Idea Cellular has pushed up prices.