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Broadband spectrum auction brings billions, biggies stay away

India's auction of spectrum for broadband wireless access (BWA) services ended Friday enriching the government by Rs 38,543.31 crore (over $8.56 billion).

india Updated: Jun 11, 2010 17:42 IST
IANS

India's auction of spectrum for broadband wireless access (BWA) services ended Friday enriching the government by Rs 38,543.31 crore (over $8.56 billion).

The 16 days and 117 rounds of auction saw many of the big telecom operators like Reliance Communications dropping out of the race as the license prices shot through the roof.

The pan-India license price stood be at Rs 12,847.77 crore (over $2.85 billion) at end of the auction in which 11 companies took part, according to official data released here.

The auction, which began May 24, saw the pan-India BWA licence price going up around 634 percent from the Rs.1,750 crore base price fixed by the government.

Infotel broadband services won licenses in all 22 circles, while Aircel bagged 7 slots, Tikona got 5 slots, Qualcomm and Bharti 4 each, and Augere 1.

It was a simultaneous online auction for two slots in each of the country's 22 service areas.

Reliance Communications and Idea chose to pull out of the auction mid-way saying they would concentrate on increasing business in the 3G services domain, the licenses for which the companies bagged in an earlier auction which ended last month.

"(BWA) auction prices significantly exceeded its business case estimates. We will focus on broadband wireless through 3G-ready pan India CDMA and maximum 13 circle 3G coverage," said a Reliance Communications spokesperson.

Reliance Communications paid Rs.8,585.04 crore towards spectrum fees for 3G sevices in 13 service areas, while Idea shelled out Rs.5,768.59 crore for 11 circles.

Bharti Airtel bagged four slots -- Maharashtra, Karnataka, Kolkata and Punjab for Rs.3,314.36 crore. The compay had bid for all major 3G circles earlier spending Rs.12,295.46 crore.

"A combination of scarcity of slots and the auction format, once again, resulted in extremely high price levels. The Company has secured BWA spectrum in select circles to experiment with new technologies for a total consideration of Rs.3,314.36 crore," said a Bharti statement.

The government has already raised Rs.67,719 crore from 3G spectrum auction. The total revenue of the government from sale of spectrum for both 3G and BWA touched over Rs.1.06 lakh crore.

BWA spectrum is essential for rolling out Worldwide Interoperability for Microwave Access (WiMAX) services enabling hand-held devices and laptops to access the Internet.

According to the latest information available on the website of the Department of Telecommunications (DoT), Mumbai and Delhi attracted the highest bids. Mumbai got bids of Rs.2,292.95 crore, while Delhi got bids worth Rs.2,241.02 crore.

Bharti Airtel, Reliance WiMax, Idea Cellular, Aircel, Augere Mauritius Ltd, Infotel Broadband Services, Qualcomm, Spice Internet Service Provider, Tata Communications Internet Services, Tikona Digital Networks and Vodafone Essar - took part in the BWA auction.

The government is pushing to increase broadband usage in a country. Only nine million of the country's more than one billion people are reported to have access to such connectivity.

First Published: Jun 11, 2010 17:41 IST