Spectrum auction off to slow start as telcos play safe

The biggest-ever spectrum auction has received a lukewarm response on the first day with bids worth Rs 55,000 crore being received at the end of four rounds. The muted response has been attributed to high reserve price as debt-ridden telcos are in no mood to pile up the burden further.

At the time of going to press, bidding had entered the fifth round. These bids accounted for 90 per cent of the total spectrum put on auction. It also meant that the auction would complete in a few days and the government may get much lower than the budgeted amount this financial year.
 

In an indication of the low-key auction, no bidding activity was seen in the premium 700-Mhz and 900-MHz bands. However, there was some activity in the other bands. The 2,300-MHz band was the most sought after due to its pure play data quality.

According to sources, 2300-MHz was likely to be sold out whereas a good quantum of airwaves would also be sold in 1,800-MHz, 2,100-MHz and 2,500-MHz bands. As much as 2,354.55 megahertz (MHz) of frequencies are being put up for auction in seven bands — 700-MHz, 800-MHz, 900-MHz, 1,800-MHz, 2,100-MHz, 2,300-MHz and 2,500-MHz.

According to sources, there were no bids in 700-MHz and 900-MHz bands. For 800 MHz, there was moderate demand in four circles whereas for 1,800-MHz, operators were fighting in a few circles, particularly Mumbai and Maharashtra.

In 2,100-MHz, only 12 bids were received as against 80 slots being offered. While 2,300-MHz band was fiercely fought for by telcos, 2500-MHz received only 10 bids against the 40 slots on offer.

The government has put up airwaves worth Rs 5.66 lakh crore for sale. Seven mobile operators including Reliance Jio, Bharti Airtel, Vodafone, Idea Cellular, R-Com, Aircel and Tata Teleservices are participating in the auction.

The auction is crucial as it will allow telcos to firm up their spectrum holdings for data as most of the bands which are on sale can be used for data. The amount of spectrum up for sale is more than any previous auctions, which will enable bidders to provide better services, as per international benchmarks. The issue of spectrum fragmentation that has dogged the telecom sector for many years is likely to become a thing of the past.

In a bid to make the auctions bidder-friendly, the government plans to assign the spectrum within 30 calendar days of the payment. It takes 10 days to make payment after the auction ends.

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WAR FOR AIRWAVES

• Bids worth Rs 55,000 cr received on Day 1 at the end of five rounds
   
• Muted response attributed to high reserve price as debt-ridden telecom operators are bidding cautiously
   
• On Day 1, bids accounted for 90% of the total spectrum available for sale
   
• Government targeted revenue of Rs 64,000 crore from spectrum auction
   
• No bidding in the 700-MHz and 900-MHz bands
  

 

Selective bidding in 800-MHz band
 

Most telcos show interest in 1,800-MHz, 2,100-MHz and 2,300-MHz bands
 

In 2,500-MHz band, 9 out of 22 circles saw bidding