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Telecom companies may find it hard to finance 2G bids

business Updated: Feb 08, 2014 07:31 IST
HT Correspondent

The auction to sell 2G spectrum slowed down a tad on Friday, but with an estimated Rs 42,160 crore expected to come in according to the latest bids, the process seemed to be well on course to achieving its objectives. The revenues are estimated on the basis of a points system linked to the value of bids received.

The government targets an amount of Rs 40,847 crore from the auction in the current year, while overall bids had totalled Rs 46,000 crore at the end of the third day of bidding that started on Monday.

Over the next couple of days, the bids are expected to reach Rs 50,000 crore. The bids can be withdrawn, and the total amount on offer can fluctuate during the auction process.

Bharti Airtel and Vodafone have taken a clear lead with maximum blocks because they badly need the spectrum, a senior DoT official said. “The next round of bidding that begins on Saturday, is unlikely to show traction and we feel it will taper down by next week,” said the Chief Financial Officer of a leading telecom company that is bidding in both 900 and 1,800 MHz spectrum bands.

The 2G spectrum is critical for established incumbents like Bharti Airtel and Vodafone, as their telecom licences come up renewal this year.

On day five, circles like Delhi and Mumbai saw demand go up, while circles like UP (West), Bihar and Gujarat showed lower demand.

The government is largely on track in the auction for spectrum forced by the Supreme Court after a scandal.