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Demand for spectrum appeared to increase Day 2 of India’s 2G auctions of 2014, and circles in both the 900MHz and 1800 MHz blocks appeared to increase. We wouldn’t read too much into demand being lower for some circles at the end of the 7th round, because as we saw during the 3G auctions in 2010, telecom operators often tend to pace their bidding. Here’s the lowdown from Day 2:

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900 MHz (Block size is 1 MHz)
– Mumbai: Price of spectrum increased by Rs 224.05 per block, 68.3% higher than the base price, to Rs 552.05 crore, which is the provisional winning price for this circle. Price increased by Rs 78.81 crore during the 7 clock rounds, 16.7% higher than the previous day.
– Delhi: Price increased by Rs 181.34 crore per block, 50.4% higher than the base price, to Rs 541.34 crore. Rs 530.73 is the provisional winning price for this circle, due to deficit demand in the last (14th) round yesterday. Delhi recorded the highest increase in the day, of Rs 112.42 crore, higher by 26.2% from the previous days close.
– Kolkata: Price increased to Rs 67.71 crore, 54.2% higher than the reserve price, and 11.3% higher than the previous days close. The provisional winning price is Rs 183.54 crore per block, due to deficit demand.

1800 MHz (Block size is 200 KHz)
– Price in Gujarat is Rs 33.76 crore, 18% higher than its reserve price, and up 13.5% for the day. For the next round, the price of spectrum in Gujarat is being increased by Rs 0.67 crore per block.
– Price in 9 Circles is now higher than the reserve price: Gujarat, Jammu & Kashmir, Bihar, UP (East), UP (West), West Bengal, Assam, Delhi, Maharashtra. Price in 13 circles remained at the reserve price.
– At the end of round 7, the circles with the lowest demand for spectrum remained the same: Tamil Nadu, followed by Orissa and Haryana.

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As per MediaNama’s calculations (provisional winning price/block x number of blocks available), the bids would amount to Rs 19894.04 crore in the 900 MHz band, and Rs 35450.66 crore in the 1800 MHz band. That’s a total of Rs 55344.7 crore bid at the end of round 14. However, please note that other publications are reporting the numbers differently. We’ll verify the correct calculation and update this post if needed. Mint is reporting that cumulative bids were Rs 40,800 crore.

What They’re Saying

– As if there was ever any doubt about this, FirstBiz writes that this current 2G auction proves that “Raja scam was real, CAG was more right than wrong“. We wonder what Kapil “Zero Loss” Sibal has to say about this.
– Mint quotes an unnamed telecom department official who says that telecom operators are pacing their bids, and bidding is expected to pick up before the auction ends.  Read more.
– DNA quotes “official sources” as saying that leading telecom operators have started bidding for 1800 MHz now, because the price of 900 MHz is much too high. “If I can get 1800 MHz for half the price of 900 MHz, why should I not go for the cheaper one. I would rather invest the ‘saved’ money in improving my operations” Read more

– Moneycontrol says that the reason why bids are high for 900MHz is because Airtel and Vodafone’s licenses are up for renewal at the end of 2014. Jio is trying to enter the Mumbai circle with 900 MHz. Read this here, and also read this interview with TRAI chairman Rahul Khullar on the auctions.

Auction Daily

– Day 1: Mumbai 900MHz Price Up 44.28% From Reserve; Bids In 1800 MHz Low

Our 2G Auctions 2014 coverage

– 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