3G: RC, Bharti win big; Govt gets 67710 cr

The auction for 3G mobile licence closed, leaving govt with 67710 cr - twice the revenue expected.

New Delhi: The auction for 3G mobile licence
ended today with RCom, Bharti and Aircel bagging 13 circles
each, and will leave the government with a Rs 67,710 crore
revenue windfall.

However, no single operator managed to bag all 22 circles
on offer -- the total bid price for which touched Rs 16,750.58
crore on the 34th day of bidding today.

Anil Ambani-led RCom will pay Rs 8,585.04 crore towards
the 3G licence, but the single largest outgo would be from
Bharti that will pay Rs 12,295.46 crore.

Vodafone, which is second in terms of fee outgo, would be
paying over Rs 11,617 crore for licence to offer high-speed
voice and data service in nine circles.

Key circles Mumbai and Delhi went to Bharti, Vodafone and

Bharti complained that the auction format and severe
shortage drove up the prices beyond reasonable levels.

The government had fixed a reserve price of Rs 3,500
crore for 3G spectrum and had originally estimated to raise Rs
35,000 crore from the sale.

"We would like to point out that the auction format and
severe spectrum shortage, along with ensuing policy
uncertainty, drove the prices beyond reasonable levels. As a
result, we could not achieve our objective of pan-India 3G
footprint in this round," Bharti said in a statement.

Nine operators, who were in the fray for three-four slots
of spectrum, had welcomed the format in the mock auction.

"They knew what they were bidding. I`m quite certain we
should respect the market determined price," telecom regulator
J S Sarma said.

"I calculated Rs 35,000 crore (revenue from 3G and
Broadband Wireless spectrum sale) in the Budget. I`m getting
Rs 67,000 crore, almost double. So, (I will get) that much
elbow room," Finance Minister Pranab Mukherjee said today.

The revenue mop up will help the government cut its
fiscal deficit to nearly 4.9 per cent from 5.5 per cent of GDP
projected in the Budget.

"I`m happy to see that the government is going to earn
more than expected," Telecom Minister A Raja said.

Delhi spectrum went for Rs 3,316.93 crore, while that
the bid for Mumbai closed at Rs 3,247.07 crore.

The auction of Broadband Wireless Access spectrum will
start in two days and could push up the government`s revenue
mop up. The reserve price for BWA radio waves is Rs 1,750
crore for pan-India licence and 11 players are in the fray to
grab the two slots on the block.