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The demand for spectrum in the 1800MHz band saw a significant increase in the Madhya Pradesh and Jammu & Kashmir circles on the Day 4 of India’s 2G auctions of 2014. However, note that this is not indicative of activity in the following rounds since the bidding strategy typically changes with each round. Here’s the lowdown from Day 4:
900 MHz (Block size is 1 MHz)
– Price of spectrum in Delhi increased by Rs 285.63 crore per block, 79.3% higher than base price, to Rs 645.63 crore. The provisional winning price for the circle was however a bit lower at Rs 639.24 crore due to deficit demand in the last (28th) round yesterday. Delhi recorded the highest increase during the day, of Rs 71.55 crore, higher by 12.46% from the previous days close.
– Price of spectrum in Mumbai remained the same as the previous day: Rs 568.72 crore, which is 73.4% higher than the base price.
– Price of spectrum in Kolkata also remained the same as the previous day: Rs 194.63 crore, which is 55.7% higher than the base price.
– There was no excess demand for spectrum and all three circles were in fact in deficit demand by the end of the day.
1800 MHz (Block size is 200 KHz)
– Price in Assam increased the most in percentage terms on a day-to-day basis: by 34.22% to Rs 2.51 crore, which is 79.3% higher than its reserve price. For the next round, the price of spectrum in Assam is being increased by Rs 0.02 crore per block.
– Price in Maharashtra increased the most in absolute terms on a day-to-day basis: by Rs 7.78 crore per block to Rs 48.64 crore, which is 40.6% higher than its reserve price.
– For round 29, price is being increased for six circles due to excess demand: Gujarat by Rs 0.67 crore per block, Uttar Pradesh (West) by 0.16 crore, Uttar Pradesh (East) by 0.12 crore, Madhya Pradesh by 0.08 crore, Jammu & Kashmir by 0.02 crore and Assam by 0.02 crore.
– Price in 10 Circles is now higher than the reserve price: Gujarat, Jammu & Kashmir, Madhya Pradesh, Bihar, UP (East), UP (West), West Bengal, Assam, Delhi, Maharashtra. Price in 12 circles remained at the reserve price.
– At the end of round 28, the circles with the lowest demand for spectrum was Tamil Nadu, followed by Orissa and Haryana.
As per MediaNama’s calculations (provisional winning price/block x number of blocks available), the bids would amount to Rs 21,935.22 crore in the 900 MHz band, and Rs 36,981.88 crore in the 1800 MHz band, which makes it a total of Rs 58,971.10 crore bid at the end of round 28. Mint reports that cumulative bids were Rs 53,000 crore while PTI reports that total bids were Rs 52,500 crore.
– The Hindu BusinessLine says the auction in 900MHz band is not ending because there’s meaningful spectrum for only three players but there is demand from at least four players (existing players Airtel, Idea, Vodafone and new entrant Reliance Jio). It mentions that at some point, one of the existing players will have to choose between buying spectrum in 900MHz band at a high price or buying spectrum in the inefficient 1800MHz band and spending more in deploying additional base stations to meet the 1800 MHz band requirements.
– DNA says demand for circles like Assam and Bihar has been more since telcos are looking for regions with poor penetration, where the business potential will be quite high.
– Mint says the telecom auction money should be used to build new capital assets instead of using it to bridge the annual fiscal gap. It says India should create a new national investment fund which will automatically receive money from asset sales, and the money will then be used to build infrastructure.
Auction Daily
– Day 1: Mumbai 900MHz Price Up 44.28% From Reserve; Bids In 1800 MHz Low
– Day 2: 2G Auctions Day 2: More Activity In 1800 MHz; Mumbai In 900 MHz Up 68.3% Above Base
– Day 3: 2G Auctions Day 3: Bihar & Assam Cross 3G Spectrum Price
Our 2G Auctions 2014 coverage
– SC Reject Telcos Plea To Stay 2G Auctions; DoT Reduces Available 1800MHz Spectrum
– Vodafone Seeks 1% Uniform Spectrum Usage Charges For 3G & BWA Spectrum
– 5% Spectrum Usage Fee For New Spectrum in 2014 2G Auctions Pre-Qualified Bidders
– 2014 2G Auctions: 8 Telcos Submit Bids; Videocon, Loop & SSTL Not Participating
– DoT Modifies 2014 2G Auction Guidelines: Rollout Obligations, Performance Guarantees
– India’s 2014 2G Auction Postponed: To Begin On 3rd February 2014
– The Lowdown: DoT’s Guidelines For 2G Spectrum Auction In January 2014
