Spectrum auction begins, 8 telecom firms in fray

The Department of Telecom has put on block around 385 MHz of radiowaves in the 1800 MHz band, and 46 MHz in the 900 MHz band. As per the rules of the auction, every company has been given quota of 240 minutes to extend bid round.

The third round of spectrum auction started today with eight telecom companies in fray, from which the government expects to garner at least Rs 11,300 crore. "The auction started at 9 am today," an official source said. The Department of Telecom has put on block around 385 MHz of radiowaves in the 1800 MHz band, and 46 MHz in the 900 MHz band. As per the rules of the auction, every company has been given quota of 240 minutes to extend bid round.

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This means throughout the auction, each company can extend auction round by total of 4 hours. Normally 6-7 rounds take place in a day with each round of 60 minutes. There is a 20-minute break between the rounds. The government has to conduct this third round of spectrum auction following a Supreme Court order in 2G case directing that all the radiowaves freed from the cancellation of 122 licences in February 2012 should be auctioned. Besides, 900 Mhz has to be auctioned as some of the radiowaves in this band are held under old telecom licences which will start expiring from November 2014.

The 3G auction in 2010 lasted for 34 days, while the auction in November 2012 lasted for 2 days and March auction last year lasted for only one day. In November 2012, bids worth Rs 9,407 crore were received for spectrum worth Rs 28,000 that was offered. In March 2013, no GSM operators bid at the auction and only CDMA operator Sistema Shyam bought spectrum of about Rs 3,600 crore in eight of the 21 service areas.

It is necessary for Vodafone to get spectrum in Delhi, Mumbai and Kolkata; for Airtel in Delhi and Mumbai, and Loop Mobile in Mumbai for continuing operations because their licences are expiring in November. The government is hopeful of all the spectrum put on auction table to be sold out. The government has set a target of Rs 40,874.50 crore for this fiscal from spectrum, including the auction amount, one-time spectrum charge and annual regular licence fee.