Less frenzy on day six of spectrum auction, bidding value drops to Rs. 92,200cr

BANGALORE, INDIA: The sixth day of the spectrum auction saw a slight drop in the bidding value. After 37 rounds of bidding  the provisional bidding value reach Rs. 92,200 crore- which is Rs. 1,800 crore less from the day five.

The reason could be switching the preferred frequencies by the bidder due to high prices. The bidding norms allow the bidders to quit bidding and switch from a particular band to a new band if it is considered to be financially viable for them.

According to a statement from the telecom department, a shift in activity has been recorded from 900 MHz bands to 1800 MHz and 800 MHz bands. A fair amount of activity is recorded in two new service areas in 1800 MHz band.  Less activity has been noticed in 2100 MHz as well.

At present, over 83 percent spectrum has been provisionally allocated to bidders. Eight operators -Bharti Airtel, Idea Cellular, Vodafone India, Reliance Communications, Aircel, Uninor, Tata Teleservices along with the new entrant Reliance Jio Infocomm are participating in this bidding.

The government is looking to mop up at least Rs. 100,000 crore by selling the 2G spectrum in the 800MHz, 900MHz, 1800MHz bands and the 3G spectrum in the 2100MHz  band respectively. The base price of these spectrums is Rs. 82,000 crore.

The government is likely to get about Rs. 25,000 crore immediately from the spectrum auction, as bidders who win finally have to make an upfront payment of 25-33 per cent of the final sale price.

Most of the spectrum put on the auction is held by Bharti Airtel, Vodafone, Idea Cellular and Reliance Telecom at present and will expire within the period of Dec'15 to May'16. Bidding is mandatory these operators, if they want to continue to offer services in the existing areas. 29 licenses in 18 service areas will expire in 2015-16 including 9 circles Idea Cellular,  6 circles  of Airtel and 7 circles each of Vodafone and Reliance Telecom.

The bidding will continue today, as there is still spectrum, which is yet to be sold.