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The government's revenues from auction of telecom spectrum came down to Rs 92,000 crore on Tuesday (end of Day-6) from Monday's (end of Day-5) assured sum of Rs 94,000 crore, breaking the surge recorded daily in revenues for a straight five days since the start last Wednesday.
After six rounds of bidding on Day-6, the government's revenues stood at Rs 92,000 crore from a total of 37 rounds since the start on March 4, according to the department of telecommunications (DoT).
Sources said due to increased activity in lower value spectrum like 1,800 MHz, overall allocation has increased but the price has slightly moderated. However, experts say it is because of the peculiar auction design and unsold spectrum left in many bands, despite prices going up, that the government revenues have come down. Also, some of those who bid at a higher price on Monday, Day-5, left the fray in a particular circle or circles, bringing down the total revenues by Rs 2,000 crore.
"The bidding has taken place in all bands. Brisk bidding was seen on the sixth day, with the activity requirement set at 100 per cent. Currently, over 83 per cent of the spectrum has been provisionally allocated to bidders at a value of about Rs 92,200 crore. A majority of service areas are going at a premium over the reserve price. With 100 per cent activity requirement and activity in new service areas, competitive bidding is expected to continue," according to DoT.
There was activity in two new service areas, Gujarat and Kerala, in 1,800 MHz. Also, there was a shift in activity from the 2,100 MHz and 900 MHz bands to 1,800 MHz and 800 MHz on Day-6. At day's end, telcos secured spectrum in 11 circles in 900 MHz, seven circles in 800 MHz, eight in 1,800 MHz and 13 circles in 2,100 MHz, according to DoT. "There is still spectrum yet to be sold," it said.
Till now, in the 800-MHz band, of 20 circles, 14 have seen activity. In 2,100 MHz, 14 circles have seen activity of the total of 17. In the 900-MHz band, all 17 circles have seen activity, while in 1,800 MHz, 13 circles have seen activity so far of the total 15 circles. Through the ongoing auction, the government is selling 380.75 MHz of spectrum in the 800, 900 and 1,800 MHz bands, beside 5 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 four bands - 800, 900, 1,800 and 2,100 MHz. Till now, the most aggressive bidding has been in 900 MHz, used for offering voice services. According to the new norms, this band can also be used for third generation (3G) mobile services. The largest revenue for the government will also come from here.
The mobile 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. So, the ongoing auction is crucial for these companies. 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 band.
On the first day, the government had bids for Rs 60,000 crore. The auction is expected to go on for at least two weeks. In the previous spectrum auction, in February 2014, the government had raised Rs 62,162 crore.
Reliance Jio, Tata Teleservices, Uninor and Aircel are also participating in the auction.
DoT won't be able to announce the final results because of a Supreme Court order barring it from doing so without the latter's permission. A hearing in the SC in this regard is scheduled for March 26.
The reserve price approved is Rs 3,646 crore for one MHz pan-India in the 800 MHz band, Rs 3,980 crore for the 900 MHz band pan-India, Rs 2,191 crore for the 1,800 MHz band pan-India and Rs 3,705 crore for every MHz in the 2,100 MHz band.
