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Auctions 2016 Day 1: Rs 53,531 Cr in bids; 700MHz & 900MHz unsold

wireless-tower-spectrum

The department of telecommunications has received bids worth Rs 53,531 crore across 5 bands—800 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz bands on the first day of spectrum auctions, according to a PTI report. The 700 MHz band being sold at a reserve price of Rs 11,845 crore per MHz and the 900 MHz band saw no takers on the 1st day.

Telcos have shown most interest in the 1800 MHz band used for delivering 2G/4G services, closely followed by 2100 MHz band (used for 3G/4G), 2500 MHz band (used for 4G), 2300 MHz band (4G), and minimal interest in 800 MHz band (2G/4G), the report added.

Auctions were conducted in five rounds across these bands, and according to bidding details released on the DoT site, telcos have also shown active interest in North Eastern circles including Assam, West Bengal, followed by other circles like Jammu and Kashmir, Bihar, Haryana, Gujarat, Punjab, and Rajasthan.

Note that there are 7 telcos bidding for this year’s auctions namely Idea, Vodafone, Airtel, Aircel, Tata Teleservices, Reliance Communications, and Reliance Jio. These telcos have together submitted Rs 14,653.07 crore as Earnest Money Deposits (EMD)—a mandatory Bank Guarantee from a Scheduled Bank for the purpose of pre-qualification—and from application fees.

This will be India’s largest telecom spectrum auction, while the government expects bids worth Rs 5.6 lakh crore for this year. A total of 2,354.55 megahertz of spectrum across 7 different bands will be auctioned off in 2016, which is  5 times more than what government sold in 2015—418.05 MHz of spectrum.

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Band-wise bids placed on 1st day

According to data released by DoT, across 22 Licensed Service Areas (LSAs) or telecom circles:

The 800 MHz saw bids being placed in just 4 circles out of the 19 available circles. Bids on the first day was mostly active in the Rajasthan circle followed by Gujarat, Punjab, and Uttar Pradesh (East). Excess demand was seen for 800MHz in Rajasthan circle after completion of 5 rounds, increasing the reserve price to Rs 262.65 cr for 6th round, an addition of Rs 7.65 cr.

The 1800 MHz saw interest in 19 circles out of the 22 circles that it was made available. Haryana circle’s reserve price for the band was incremented to Rs 9.86 cr for 6th round, an addition of Rs 14 lakh. Kolkata circle has a higher reserve price of Rs 30.23 cr, an addition of Rs 15 lakhs for Round 6. Uttar Pradesh (East) circle has an incremented price of Rs 23.23 cr after an addition of Rs 23 lakh for next round. Mumbai circle’s reserve price will be increased to Rs 73.16 cr, by adding Rs 3.48 cr for next round.

The 2100 MHz saw minimal interest with bids being places in 7 circles out of the 22 circles it was available in.  Most interest was seen in circles like Bihar, Tamil Nadu, and Uttar Pradesh (East).

The 2300 MHz was made available in 16 circles for this year’s auctions and saw bids being placed in 5 circles on the first day.  Bihar circle’s reserve price for the band in 6th round will be increased to Rs 60.90 cr, an addition of Rs 30 lakh. Gujarat circle’s reserve price will be increased to Rs 459.5 cr, an addition of Rs 21.88 cr for next round. Kerala circle will have a higher reserve price of Rs 171.37 cr for 6th round, an addition of Rs 85 lakh.

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The 2500 MHz being auctioned off in all 22 circles had bids being placed in only 7 circles on the first day of auctions. Most activity in this band was seen in circles like Kolkata, Maharashtra, Mumbai, Delhi.

-The 700 MHz band considered crucial to 4G and LTE adoption, which has properties to avoid interference from higher frequency bands had no takers on the first day. The band is made available for auctions in all 22 circles.

The 900 MHz band which is GSM based band used mainly for 3G also saw no takers. The band is available in only 4 circles including Bihar, Gujarat, Uttar Pradesh (East), Uttar Pradesh (West)

Corrigendum: The headline has been updated for clarity. The story has been updated to reflect excess demand increase in certain bands and increase in reserve prices.

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