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On the day 7 of India’s 2014 2G auctions, bidders seems to have shifted their focus to the 1800MHz band with the Assam circle continuing to see excessive demand for spectrum while Maharashtra circle also witnessed excessive demand for spectrum during the day. This however may not be indicative of future trends since the bidding strategy typically changes in every round. Here’s a quick lowdown from day 7:
900 MHz (Block size is 1 MHz)
– Price of spectrum in Delhi has increased by Rs 388.36 crore per block, 107.9% above its base price, to Rs 748.36 crore. The provisional winning price for the circle was however a bit lower at Rs 740.96 crore due to deficit demand in the last (49th) round yesterday. On a day-to-day basis, price of Delhi increased by Rs 7.40 crore per block, up 1% from the previous day close.
– All the three circles were in deficit demand by the end of round 49.
– Price of spectrum in Kolkata remained the same as the previous day: Rs 196.57 crore, which is 57.3% higher than the base price.
– The price of spectrum in Mumbai also remained the same as previous day at Rs 568.72 crore, 73.4% higher than the base price.
1800 MHz (Block size is 200 KHz)
– Price in Delhi increased the most in absolute terms: by Rs 7.90 crore per block to Rs 71.38 crore, 63% higher than its reserve price.
– Price in Assam increased the most in percentage terms: by 27.33% to Rs 5.39 crore, which is 285% higher than its reserve price.
– For round 50, price is being increased for three circles due to excess demand: Maharashtra by Rs 1.06 crore per block, Madhya Pradesh by Rs 0.09 crore per block and Assam by Rs 0.05 crore per block.
– Price in 11 Circles is now higher than the reserve price: Gujarat, Jammu & Kashmir, Madhya Pradesh, Bihar, UP (East), UP (West), West Bengal, Assam, Delhi, Maharashtra and Mumbai. Price in 11 circles remained at the reserve price.
– At the end of round 49, 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 23,589.62 crore in the 900 MHz band, and Rs 40,906.40 crore in the 1800 MHz band, which makes it a total of Rs 64,496.02 crore bid at the end of round 49.
Telecom secretary MF Farooqui said they have received total bids worth Rs 58,332.82 crore, which is 21.7% more than the total value of spectrum put up for auction at the reserve price. He added they received bids worth Rs 34,743.2 crore in the 1800MHz band, which is 98.8% of the total value of the spectrum put up for auction at base price and they received bids worth Rs 23,589.62 crore in the 900MHz band, which is 85% higher than the total value of spectrum put up for auction at the reserve price.
– The Economic Times quotes an unnamed CEO of a telecom operator who says operator profitability and revenue are totally dependent on voice right now, however since Jio (Reliance Jio) has zero legacy revenue on voice, they will attack this segment thereby limiting the existing operator’s hand in trying to raise call rates, indicating that a price war will definitely happen shortly.
– The Hindu BusinessLine points out the spectrum prices of five circles in 1800MHz band have crossed the bid amount paid by operators for 3G spectrum in 2010. These include Assam, Bihar, Gujarat, Maharashtra and Jammu & Kashmir. It also quotes an participating operator who says 900 MHz liberalized spectrum is far more precious than the 3G spectrum and hence the current bid price is yet to reach full value.
– The Financial Express reports that telcos seeking bank loans to pay the spectrum price, have urged the government to quickly notify the spectrum trading guidelines issued by TRAI last month, so that banks become more open to give them loans.
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
– Day 4: 2G Auction Day 4: Delhi Up 79.3% Above Base In 900 MHz
– Day 6: 2G Auctions Day 6: Delhi & Kolkata In 900MHz 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
