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Spectrum auction: Govt revenues reach Rs 1.03 lakh cr

March 17, 2015 10:43 IST

At the end of 67th round, more than 87 per cent of the spectrum has been provisionally allocated to bidders.

The government’s assured revenues from telecom spectrum auction increased to Rs 1,03,046 crore at the end of the 67th round on the 11th day on Monday, compared to Rs 1,02,215 crore on the 10th day. The auction will continue on Tuesday. 

The biggest ever auction of spectrum – in the 800, 900, 1,800, and 2,100 MHz bands - had started on March 4.

The government had initially estimated to earn between Rs 80,000 crore and Rs 1 lakh crore from the sale of radio waves.

In the current round of auction, the government is selling 380.75 MHz of spectrum in the 800 -MHz, 900 MHz and 1,800 MHz bands, and five MHz in the 2,100-MHz band across 17 of the 22 circles. 

“Brisk bidding was seen on the 11th day of bidding, with activity requirement set at 100 per cent. There is robust bidding going on in the 1,800-MHz, 900-MHz and 800-MHz bands. At the end of the 67th round, 87 per cent of the spectrum has been provisionally allocated to bidders. The provisional amount committed by bidders at the end of the 67th round is Rs 1,03,046 crore. Majority of service areas are going at a premium over reserve price. The competitive bidding is expected to continue. There is spectrum, which is yet to be sold,” the Department of Telecommunications (DoT) stated. 

The DoT won’t be able to announce the final results of the auction because of a Supreme Court order barring it from doing so without its permission. A hearing in the apex court in this regard is scheduled for March 26. 

Many telecom operators are bidding fiercely to regain their existing spectrum, as 29 licences of different operators are coming up for renewal in 2015-16.

The licences of Idea Cellular (nine circles), Bharti Airtel (six circles) and Vodafone and Reliance Telecom (seven circles each) are due for renewal in 2015-16, which has made the ongoing spectrum auction crucial for them. 

Overall, 29 licences in 18 service areas are due for renewal in 2015-16. These licences are for 184 MHz of spectrum in the 900-MHz band and 34.2 MHz in the 1,800-MHz band. Seven circles -- Bihar, HP, UP west, Gujarat, Odisha and Kerala -- which are must wins for some telcos, has seen prices going up by over 100 per cent. 

In a recent note, equity research firm Morgan Stanley had predicted that the current auctions could settle at Rs 1,18,500 crore.

"Operators would need a hike in tariffs of 5 paise or 15 per cent to neutralise its impact on profits. The spectrum is valid for 20 years and hence, there is a lot more certainty from a business continuity perspective. Data growth is happening at a robust pace, which should aid overall revenue growth for the operators," it noted.

BS Reporter in New Delhi
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