Amid fears of telecom tariffs going up, the spectrum auction began on a high note on Wednesday, with operators making bids worth an estimated Rs 60,000 crore.
The day witnessed aggressive bidding by all eight companies to acquire airwaves in four bands, the premium 900 MHz band, 1,800 MHz and 800 MHz has been put on sale, besides 5 MHz in the 2,100 MHz band, across 17 out of 22 telecom areas in the country.
The auction that began on Thursday is likely to help the government rake in over Rs 1 lakh crore. A total of 380.75 MHz of spectrum in three bands and 5 MHz in the 2,100 MHz band are on the block.
“The auctions are likely to reset competition scenario in the country,” said Hemant Joshi, partner, Deloitte Haskins & Sells. “Considering large stakes are involved for the government and telcos we should not be surprised that the auctions go on for over 100 days.”
Based on the reserve price, the government is estimated to garner over Rs 1 lakh crore. Most of the spectrum put up for auction is currently held by four operators, which will expire in 2015-16. Mobile licences for Idea Cellular’s 9 circles, 6 circles of Airtel and 7 circles each of Vodafone and Reliance Telecommunications are coming up for renewal.
This auction is critical since 29 licences in 18 service areas face expiry. These licences hold 184 MHz spectrum in the 900 MHz band and 34.2 MHz in the 1,800 MHz band. Companies have to bid and win spectrum as their licences will expire this year. It is important to maintain the continuity of mobile and other telecom services.
The Centre received Rs 62,162 crore from the last spectrum auction held in February 2014.
“The telecoms auction starting today is likely to see intense bidding by telcos to retain their existing spectrum and to acquire new spectrum as supply is limited,” Fitch Ratings said.