Over 60% spectrum remains unsold
The spectrum auction crawled on the third day, adding Rs 4,097 crore of bids to take total commitments to Rs 60,969 crore but over 60 per cent of the airwaves remained unsold as premium 4G bands found no takers.
The debt-ridden telecom players stayed away from high-cost 700-MHz and 900-MHz bands even on the third day of bidding.
After 17 rounds of bidding, about 900 MHz spectrum was sold, compared with 2354.55 MHz that was up for auction. With the activity level reaching 100 per cent, the auction was said to be nearing completion. If the auction closes in a day to two, the government will get about Rs 65,000 crore. That would mean collection of about Rs 25,000 crore upfront in the current fiscal, significantly lower than the budgeted Rs 64,000 crore. The finance ministry in the Budget pegged the revenue target at Rs 98,995 crore from the telecom space.
Mumbai continued to witness competition among operators in 1800-MHz band and bidding entered round 18. Tata Teleservices was fighting to retain some spectrum in Mumbai and Maharashtra. Also, UP East and few other circles in 1,800-MHz witnessed good demand by telcos. Rajasthan saw intense fight in 800-MHz band with price increment for the next round. According to analysts, GSM incumbents were pushing Tata Teleservices to the corner in Mumbai for renewal of 1,800-MHz, which has seen 39 per cent price rise in two days.
In terms of quantum, most spectrum in 2,300-MHz was sold, followed by 1,800-MHz. In 2,500-MHz, some airwaves were sold. Similar was the case with 2,100-MHz. A little spectrum in 800-MHz has been bought by some telcos.
IDFC Securities in a report said 2,300-MHz and 2,500-MHz have seen a lot of demand with spectrum sold across 16 circles in 2,300-MHz and 10 circles in 2,500-MHz band.
Analysts also feel that healthy demand for 2,300-MHz and 2,500-MHz means that Idea and Vodafone are moving to adopt these 4G bands over 2,100-MHz.
According to industry sources, Vodafone emerged as the most aggressive bidder with bids of around Rs 17,000 crore, followed by Reliance Jio (Rs 16,000 crore), Idea Cellular (Rs 15,000 crore) and Airtel (Rs 13,000 crore). However, the same could not be officially confirmed.
Prashant Singhal, Global Telecommunications Leader, EY said the auction clearly underscores operators’ reluctance to trade on exorbitant reserve prices.
The premium 700-MHz band alone has the potential to fetch bids worth over Rs 4 lakh crore if the entire spectrum in this band is sold at the base price. However, at a reserve or base price of Rs 11,485 crore per MHz, it is considered to be priced very expensive in spite of its inherent advantages in terms of propagation ability and potential savings.
The government has put up airwaves worth Rs 5.66 lakh crore for sale. Seven mobile operators including Reliance Jio, Bharti Airtel, Vodafone, Idea Cellular, R-Com, Aircel and Tata Teleservices are participating in the auction.
Spectrum auction: Govt gets bids worth around Rs 60,969 cr on Day 3 | Business Standard News
