3G licence price crosses Rs.9,500 crore mark

NEW DELHI, INDIA: India on Friday concluded 104 rounds of an auction to award spectrum for third generation (3G) telecom services in the country, with the provisional winning price for a nationwide licence crossing Rs.9,500-crore mark.

At the end of the 18th day of the auction, which began April 9, the provisional winning price for a pan-India licence stood at Rs.9,521.02 crore, up 172.03 percent from the Rs.3,500 crore reserve price fixed by the government.

For the fifth consecutive day, Mumbai attracted the highest bid, at Rs.1,506.41 crore. The provisional winning price for Delhi stood at Rs.1,459.96 crore, followed by Maharashtra at Rs.1,010.63 crore, according to data available on the website of the Department of Telecommunications (DoT).

Haryana, Uttar Pradesh (East), Madhya Pradesh, and the northeast could not attract even a single player, the data showed.

In a comment Thursday, the DoT mentioned on its website that the activity requirement will be set to 90 percent in round 104. This means that almost 90 percent of 3G auction is completed, and with just 10 percent activity left the auction is expected to conclude early next week.

Communications Minister A. Raja assured parliament Thursday that the 3G auction is being conducted in a totally transparent manner and would be over in a couple of days.

Slots for three-four players are available in each of the 22 circles into which the country has been geographically divided for the 3G services, which will facilitate much faster connectivity than now and enable applications such as Internet TV, video-on-demand, audio-video calls and high-speed data exchange.

The government has already given Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) spectrum for 3G services on the condition that they will pay the same licence fee as would be levied on private players after the auction.

Along with the fee that will be eventually paid by the two state-run enterprises for the licences, the government will provisionally get at least Rs.38,452.75 crore from the auction.

This is on the presumption that every available slot gets filled at the provisionally approved price.

The government expects to raise Rs.55,000 crore from the ongoing auction of radio frequency spectrum for 3G telecom services and for rolling out broadband wireless internet services in the country.

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.

This is a simultaneous auction for the 22 circles over a secure website. At each round, the price is hiked from between 10-1 percent based on 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.

The bid data, including the winning companies' names, will be made public after the auction's completion and approval by the government. 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 September 1.