3G bids inch up on second day of auction

NEW DELHI, INDIA: Bids rose on the second day of India's multi-billion dollar third-generation (3G) auction, with one provisional winning bid for national cover touching 40.85 billion rupees ($922 million), or about a 17 percent premium to the base price, government data showed.

A total of 10 rounds of bidding had been completed by Saturday, India's Department of Telecommunications said on its website, without disclosing which company had bid how much.

The widely-watched auction started on Friday and the multiple-round bidding process is expected to take about two weeks to complete, officials have said.

On the first day, bids were at about a 12 percent premium to the base price of 35 billion rupees for all-India spectrum.

The Round Price in Round 10 for Delhi Service Area has been recorded as Rs. 392.31 crore; whereas for Mumbai Service Area the Round price in Round 10 has been announced as Rs. 377.36 crore. Karnataka and Gujarat also attracted bids at Rs 377.36 crore each and Maharashtra, Andhra Pradesh and Tamil Nadu received bids at Rs.381.13 crore each.

Eight service areas - Jammu and Kashmir, Haryana, Punjab, Bihar, Orissa, Assam, North East and Himachal Pradesh - witnessed negative demand, or bids by lesser players than the slots available.

According to the Notice Inviting Applications (NIA) issued in February, of the 22 telecom circles, five states - Punjab, Bihar, West Bengal, Himachal Pradesh and Jammu and Kashmir - will have four private players for the auction.

Other circles, including the four metros of Delhi, Mumbai, Kolkata and Chennai, will have three private players.

The number of slots up for grabs exclude those allotted to state-run Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, which were allotted licences last year and have since started offering 3G services in their operating circles. But they will have to match the price paid by the highest bidder in their zones.

As many as nine telecom companies - Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications - are participating in the online auction process.

Bharti Airtel, Reliance Communications, Vodafone Essar, Tata Teleservices, Idea Cellular and Aircel are bidding for an all-India spectrum, while Videocon, S Tel and Etisalat are bidding only for selective circles.

The government has fixed a reserve price of Rs.3,500 crore for pan-India 3G spectrum. It is a simultaneous auction of 22 service areas over a secure website on the Internet.

The auction has multiple rounds. At each round, the price is hiked from anywhere between 10 to 1 percent over the previous round's price depending on the demand.

The auction is being held from 9 a.m. to 7.30 p.m. on all days, except Sundays and national holidays. The process will end only when the demand is equal to the number of slots available in each circle.

According to a senior DoT official, it is difficult to set a time-frame for the 3G bidding.

"It may take two weeks, or may stretch for a month also," the official said.

The bid data, including the winning companies' names, will be made public after the auction's completion. The winning firms will have to deposit the money within 10 days after the auction.

The successful bidders would be allowed to offer 3G services on a commercial basis from Sep 1.

The 3G telecom services will allow faster connectivity than what is available now and enable applications such as Internet TV, video-on-demand, audio-video calls and high-speed data exchange.

The auction for broadband services will begin two days after the process concludes for 3G spectrum.

As many as 11 companies - Bharti Airtel, Idea Cellular, Aircel, Augere Mauritius Limited, Infotel Broadband Services, Qualcomm, Reliance WiMax, Spice Internet Service Provider, Tata Communications Internet Services, Tikona Digital Networks and Vodafone Essar - will bid for broadband wireless access (BWA) services.

The government has set Rs.1,750 crore as the base price for BWA spectrum.

The central government hopes to garner Rs.45,000 crore from these auctions.