Telecom spectrum auction witnessed intense bidding for the premium 900 MHz band for 2G radiowaves and pushed the rates above the price at which 3G spectrum was sold in 2010. This led to telecom scrips witnessing a sharp fall of as much as 8. 5 per cent in the day.
In 2010, the Government had sold 5 Mhz of or 3G spectrum for Rs 3,316.93 crore. After 42 rounds, the bidding since February 3 has seen the price quoted for 900 MHz band running into Rs 3,668.15 crore. But the demand for 1800 MHz band is somewhat subdued due to higher volume of radiowaves available for sale. A 5 MHz in 1800 MHz band in Delhi was going for Rs 1,511.5 crore by Monday, the 7th day of the auction.
The auction of spectrum in the 1800 MHz and 900 MHz band that began on February 3, has completed 46 rounds. Auction re-commenced with the 43rd round on Monday. The Government will get at least Rs 16,750 crore in the current fiscal. The spectrum auction entered the 43th round of bidding this on Monday with Rs 56,554 crore already committed by telecom companies.
The bidding was aggressive for the premium 900 Mhz band from companies such as Vodafone, Reliance Jio and Bharti Airtel. It is a must for both Vodafone to get spectrum in 900 MHz band in Delhi, Mumbai and Kolkata and for Airtel in Delhi and Kolkata if they want to continue operations in this band as their licences are coming up for renewal in November. If the companies fail to get spectrum in 900 Mhz band, they have to shift their infrastructure to 1800 Mhz band to continue operations, entailing huge expenditure. At present, Vodafone owns 8 Mhz in the 900 Mhz band in Delhi and Mumbai, while Airtel holds 8 Mhz in Delhi.
The Government has surpassed its estimate of garnering Rs 11,300 crore from the sale in current financial year. The auction for the two bands, which have been used for 2G services so far, have received a strong response. The government's two previous auctions flopped because the floor price discouraged bidders. Out of five online spectrum auctions, the present auction is largest in terms of radiowaves on sale, and third longest till date in terms of duration. 3G auction in 2010 lasted for 34 days, broadband wireless access (BWA) ended in 16 days. 2G auction in November 2012, on the other hand, ended in just two days, while the CDMA auction in March last year concluded the same day.