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Bharti bags five circles, RIL draws a blank in 14

BS Economy Bureau

Bharti has pulled a coup by bagging five more circles at the end of the second round of bidding for the fourth cellular operators berth. Reliance is out of the race from 14 of the 15 circles. While it has bid lower than the floor price in 13 circles, the department of telecom has declared it ineligible for Delhi.

Bharti has emerged the highest bidder in seven circles out of the eleven circles it bid for. Of this Bharti has ended up as the only qualifier in five circles of Bombay, Haryana, Kerala, Tamil Nadu and Uttar Pradesh (west)as the other bidders withdrew from the race by quoting bid amounts below the floor price set by the highest bidder in these circles in the first round.

Bharti in the first round itself bagged Madhya Pradesh circle on account of being the only bidder here. The company will have to shell out a total of Rs 4 billion for bagging the licences for all these six circles.

The big surprise of the day was Reliance which is out of the race in 14 of the 15 circles it bid for. The company had initially shown a lot of interest in the bidding process by submitting 30 bids under two different companies.

However, in the first round itself Reliance had indicated its intentions by keeping its bid amounts hovering around the Rs 500-million mark vena whereas others like Bharti and Essar-Hutchison had bid in excess of Rs 1 billion. The company, which was the highest bidder for Delhi in the first round, has been declared ineligible for Delhi.

Calcutta is the only circle which is certain to be bagged by Reliance for Rs 780 million owing to Bharti's decision to opt out of the race for the circle post acquisition of Spice Cell.

Essar Hutchison, which was the highest bidder in four circles in the first round, has kept its lead. The company is certain to bag Andhra Pradesh for Rs 10.3 billion as it is the only bidder to qualify for the third round.

In Madras and Karnataka, Batata with a bid amount of Rs 1.175 billion and Rs 1.50 billion, respectively, is giving a tough fight to Essar-Hutchison which has quoted Rs 1.268 billion and Rs 1.68 billion for the circles in the second round.

Essar Hutchison will also have to watch over its shoulders in Maharashtra where Bharti has bid Rs 1.05 billion as compared to Rs 1.128 billion by Essar.

The BPL Birla AT&T-Tata combine, which had bid for three circles, has merged as the highest bidder in Delhi and is closely following Essar Hutchison in the other two.

Of the eight bids put in by Escorts, bids for Karnataka and Tamil Nadu have been disqualified owing to bid amounts being lower than the floor price. The company has emerged as the highest bidder in four of the circles and has already bagged Himachal Pradesh for Rs 10 million.

There is also not much of a change in the highest bid amount or the highest bidder in most of the circles as compared to the first round except for Delhi, Calcutta, Punjab and Uttar Pradesh (east) where Batata, Reliance, Escorts have overtaken Reliance, Bharti, Indmobile and Bharti, respectively.

The biggest change is in the Delhi circle where the highest bid amount of Rs 900 million put in by Reliance in the first round was taken up to Rs 1.706 billion by Batata in the second round.

After the second round the government is set to get at least Rs 14.86 billion as entry fee which is about Rs 2 billion more than the first round.

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