Govt to get at least Rs 16,750cr from spectrum sale this fiscal
   
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Govt to get at least Rs 16,750cr from spectrum sale this fiscal

Last Updated: Sunday, February 9, 2014, 18:46
 
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Govt to get at least Rs 16,750cr from spectrum sale this fiscal
New Delhi: The government will get a minimum of Rs 16,750 crore in the current fiscal from spectrum auction, which has so far generated bids worth Rs 56,554.92 crore after 42 rounds of bidding so far.

Telecom Secretary MF Farooqui said that there will a realisation of at least Rs 16,750 crore in the current fiscal if operators opt to pay in instalments.

The bidders can pay the part of the money upfront and the remaining amount over a maximum of 10 yearly instalments.

"A total of 42 rounds are over. Bids worth around Rs 33,082.58 crore are received for 1800 Mhz and Rs 23,472.34 crore for 900 Mhz. A total of Rs 56,554.92 crore. Auction continues on Monday," Farooqui said.

The auction is witnessing aggressive bidding in the premium 900 Mhz band from companies such as Vodafone, Reliance Jio and Bharti Airtel, with the price of Delhi circle already doubled to Rs 733.63 crore per MHz from the base price of Rs 360 crore. Mumbai has also seen over 70 per cent jump in the price to Rs 563.09 crore per MHz.

It is a must for both Vodafone to get spectrum in 900 MHz band in Delhi, Mumbai and Kolkata and Airtel in Delhi and Kolkata if they want to continue operations in the band as their licences are coming up for renewal in November.

If the companies fail to get spectrum in 900 Mhz band, they have to shift their infrastructure to 1800 Mhz band to continue operations, which may cost huge capital expenditure.

Sources said as Reliance Jio is also bidding for the 900 Mhz band, thereby leading to a price rise. At present, Vodafone owns 8 Mhz in 900 Mhz band in Delhi and Mumbai while Airtel holds 8 Mhz in Delhi.

The government has already surpassed its estimate to garner Rs 11,300 crore for the sale in current financial year.

The budget for 2013-14 set a total target of Rs 40,874 crore from spectrum revenue in this fiscal and a bumper collection through airwaves auction would help government keep fiscal deficit under control.

The country's fiscal deficit at Rs 5.16 lakh crore has already crossed 95 per cent of budget target in the first nine months of 2013-14.


The auction for the two bands, which have been used for 2G services so far, have received a strong response. The government's two previous auctions flopped because the floor price discouraged bidders.

Out of five online spectrum auctions, the present auction is largest in terms of quantum of airwaves put for sale and third longest till date in terms of duration.

3G auction in 2010 lasted for 34 days, broadband wireless airwaves ended in 16 days while 2G auction in November ended in two days and CDMA auction in March concluded the same day.

In November 2012, bids worth Rs 9,407 crore were received for spectrum worth Rs 28,000 on offer.

In March 2013, no GSM operator bid at the auction and only CDMA operator Sistema Shyam bought spectrum for about Rs 3,600 crore in eight of the 21 service areas.

There is no time limit for the sale of spectrum and the duration of the current auction will depend on the appetite of the eight companies in the fray -- Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio Infocomm, Aircel, Tata Teleservices, Telewings (Uninor) and Reliance Communications.

The government has put on the block about 385 megahertz of spectrum in the 1800 Mhz band. The auction started on February 3, following the cancellation of 122 licences by the Supreme Court in the 2G spectrum allocation case two years ago.



PTI

First Published: Sunday, February 9, 2014, 18:46


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