As leading telecom players like Airtel, Vodafone, Idea, Reliance Communications and Tata DoCoMo are ready to join battle for Friday’s auction of 3G spectrum, the government seems all set to meet its target of raising Rs 35,000 crore.
“Bids for 3G spectrum can go anywhere between 2.5 and 3.5 times the reserve price,” said Prashant Singhal, telecom industry leader, Ernst & Young. “For Broadband wireless access (BWA) spectrum, it could go up to three times.”
The government has fixed a reserve price of Rs 3,500 crore for 3G spectrum and Rs 1,750 crore for BWA spectrum. There are 3 slots available for 3G spectrum, while BSNL/MTNL has one slot. In some states 5 slots are available.
The government can expect the auction to fetch anywhere between Rs 8,750 crore and Rs 12,250 crore per slot. From four slots, the government can expect to mop up Rs 49,000 crore. BWA spectrum can fetch up to Rs 10,500 crore.
“Considering shortage of 2G spectrum and the multiple voice carrying capacity of 3G, existing operator may bid up to Rs 9,000 crore for one slot of 3G,” said Ravi Sharma, executive chairman of CMAI Association of India, the apex body of cellular manufacturers and service providers.
“I believe Rs 4,200 crore is the right price,” said R.S.P. Sinha, former CMD of MTNL, which was the first company to offer 3G in India. “The companies will have to invest on the infrastructure, that will be nearly equal to that of 2G network.”