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2G Auctions Day 3: Bihar & Assam Cross 3G Spectrum Price

Our coverage of the 2G Auctions is brought to you by OnMobile Global, India’s leading Mobile Value Added Services [VAS] company

The demand for 1800MHz spectrum appears to have further increased in the Day 3 of India’s 2G auctions of 2014, particularly in the Assam and West Bengal circle which saw a significant excess demand for spectrum. However note that this is, by no means, indicative of the activity in the following rounds since the bidding strategy will change with each round. When the activity requirement from a telco is increased to 100%, bidding will be compulsory. Here’s the lowdown from Day 3:


900 MHz (Block size is 1 MHz)
Mumbai: Price of spectrum increased by Rs 240.72 per block, 73.4% higher than the base price, to Rs 568.72 crore. The provisional winning price for this circle was a bit lower at Rs 563.09 due to deficit demand in the last (21st) round yesterday. Price increased by Rs 16.67 crore during the 7 clock rounds, 3.02% higher than the previous day.

Delhi: Price increased by Rs 214.08 crore per block, 59.5% higher than the base price, to Rs 574.08 crore, which was the provisional winning price for this circle. Delhi recorded the highest increase in the day, of Rs 32.74 crore, higher by 6.05% from the previous days close. For the next round, the price of spectrum in Delhi is being increased by Rs 28.7 crore per block.

Kolkata: Price increased to Rs 69.63 crore, 55.7% higher than the reserve price, and 1% higher than the previous days close. The provisional winning price is Rs 192.71 crore per block, due to deficit demand.

1800 MHz (Block size is 200 KHz)
– Price in Assam increased the most in percentage terms on a day-to-day basis: by 23.84% to Rs 1.87 crore, which is 33.6% higher than its reserve price. For the next round, the price of spectrum in Assam is being increased by Rs 0.13 crore per block.

– Price in Gujarat increased the most in absolute terms on a day-to-day basis: by Rs 6.11 crore per block to Rs 39.87 crore, which is 39.4% higher than its reserve price.

– 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 21, the circles with the lowest demand for spectrum remained the same: Tamil Nadu, followed by Orissa and Madhya Pradesh.

As per MediaNama’s calculations (provisional winning price/block x number of blocks available), the bids would amount to Rs 20,892.66 crore in the 900 MHz band, and Rs 36,206 crore in the 1800 MHz band, which makes it a total of Rs 57,098 crore bid at the end of round 21. However, do note that Telecom Secretary MF Farooqui has told PTI that they have received around Rs 50,000 crore at the end of 21 rounds. We’ll verify the correct calculation and update this post if needed.

2G Auctions day 3

What They’re Saying

– The Hindu BusinessLine points out that the price for spectrum in Bihar and Assam has crossed the bid amount paid by operators for 3G spectrum in 2010. It also says this aggressive bidding could lead to telcos increasing the mobile tariffs so as to balance the impact on their bottom line.

– Hindustan Times says if such aggressive bidding continues, the mobile tariffs may go up in Delhi, Mumbai and Kolkata. Cellular Operators Association of India director general Rajan Mathews has told they will be evaluating the impact on tariffs based on the final bid amount and some of it will be passed on to the consumer. However Kapil Sibal has dismissed this saying voice and data prices will not increase. Read more

– The Reserve Bank of India has also cancelled an auction of government bonds worth Rs 15,000 crore after the 2G auction attracted bids worth Rs 40,000 crore on the first day. Read more

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

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

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