Telecom Spectrum Auction comes to an end
New Delhi
The biggest auction of telecom spectrums in India came to an end on Thursday with a disappointing 60 percent of airwaves remaining unsold with even premium 4G bands being left without buyers. Despite an expectation of bids worth Rs 5.6 lakh crore, only Rs 65,789 crore bids came in during the five day auction.
UK-based Vodafone’s India unit was the most aggressive, taking home Rs 20,000 crore worth of spectrum. Bharti Airtel, the nation’s biggest telecom company, bought Rs 14,244 crore worth of spectrum, while Idea Cellular put in Rs 12,798 crore of bids. Newcomer Reliance Jio has spent Rs 13,672 crore on spectrum buying.
Telecom Minister Manoj Sinha said bids were received for 964.80 MHz of spectrum out of 2,354.55 MHz across seven bands put on offer.
“The total upfront payment to the government is about Rs 32,000 crore which is the highest in the last five years. Wherever operators wanted to improve their data services, they participated. Total, we could sell 964.80 MHz of spectrum,” Telecom Minister Manoj Sinha told reporters.
Asked if he was disappointed with the muted response, Sinha said he was happy with fact that the government will get the highest upfront payment received in the last five years.
Premium 700 MHz and 900 MHz spectrum found no takers, mainly because of high reserve or auction start price set by the government.
While Airtel acquired 173.8 Mhz spectrum across 1800/2100/2300 MHz bands, Idea Cellular won 2100 Mhz band spectrum in Mumbai circle Reliance Jio said it has acquired 269.2 MHz spectrum across all 22 circles.
“We have expanded our spectrum footprint thereby significantly enhancing capacity of our all-IP data strong network and ensuring world class services for all Indians. Jio is committed to taking India to global digital leadership by bringing the power of data to all Indians,” Reliance Industries Chairman Mukesh Ambani said.
Idea said it has procured 349.2 MHz of spectrum for Rs 12,798 crore securing additional airwaves in 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands.
According to sources, Tata Teleservices shelled out Rs 4,500 crore for securing spectrum. It has also managed to retain spectrum in Mumbai, where its licence is set to expire next September.
Spectrum in 1800 Mhz can be used for 2G/4G services, while 2100 Mhz band supports 3G/4G services. The 2500 Mhz is a 4G band, 2300 Mhz (4G) and 800 Mhz (2G/4G).
Telecom operators were in the race to arm themselves with spectrum to maintain competitive edge in providing quality and next generation mobile services to consumers in the world’s second largest telecom market.
The auction, which commenced on October 1, was spread over five days and 31 rounds.
“The issue of quality of service, spectrum scarcity in India is history with this auction. Government has not done any profiteering, this auction was about putting spectrum in the hands of the industry. The appetite of the industry has been satiated,” Telecom Secretary JS Deepak said.
The government sold the entire available spectrum in the 2300MHz band, while 700MHz and 900MHz remained untouched.
Industry body COAI said lack of enthusiasm for 700MHz band was majorly due to its “unrealistic pricing”, high debt and single-digit growth that the industry is currently reeling under.
“We are hopeful the Government and the DoT will take cognizance of the role a high reserve price had on bidding, as far as the 700 MHz is concerned, and will recalibrate the price so that spectrum in the band could be put up for auction, maybe two years from now,” COAI Director General Rajan S Mathews said.
Government sold about 20 per cent of the airwaves in 800MHz, 79 per cent in 1800MHz, 24 per cent in 2100MHz and 62 per cent in 2500MHz band.
As per the rules, companies winning spectrum in frequency bands above 1Ghz — 1800 Mhz, 2100 Mhz, 2300 Mhz and 2500 MHz — will have to make 50 per cent upfront payment, while the rest can be paid in 10 years after a two-year moratorium.
This means that the government would get about Rs 32,000 crore in upfront payment. However, this is short of the government’s target of getting Rs 64,000 crore from auction for this fiscal.