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Spectrum auctions get underway

Radiowaves valued at Rs. 3.92 lakh cr up for bidding

Spectrum auctions get underway

Spectrum auctions get underway 

New Delhi: Spectrum auction in India began on Monday, with 2,251.25 megahertz (MHz) radiowaves valued at Rs 3.92 lakh crore up for bidding.

The auction entailing seven frequency bands for mobile services - 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands - is currently underway, industry sources said. The current auction does not include frequencies in 3,300-3,600 Mhz bands that were identified for 5G services, which will happen later. Successful bidders can pay entire bid amount in one go (upfront), or exercise an option to pay a certain amount (25 per cent for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50 per cent for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront with the remaining amount in a maximum up to 16 EMIs, after a moratorium of two years. Spectrum will be offered for assignment for a validity period of 20 years.

Reliance Jio, Bharti Airtel and Vodafone Idea had submitted a total earnest money deposit (EMD) of Rs 13,475 crore for the spectrum auctions. India's largest telecom company Reliance Jio with a networth of Rs 1.79 lakh crore had submitted EMD of Rs 10,000 crore for the auctions, the highest among the three private telcos. Market watchers had said that Jio's EMD amount indicated its healthy appetite for spectrum in the auctions, particularly on the back of its swelling subscriber base. Bharti Airtel with a networth of Rs 71,303 crore has submitted EMD of Rs 3,000 crore and Vodafone Idea with a negative networth of Rs 43,474 crore has submitted EMD of Rs 475 crore. Analysts expect the auctions this time to be a low-key affair, and see bids in the range of Rs 30,000 crore-Rs 50,000 crore for the radiowaves valued at around Rs 3.92 lakh crore at base price.

Rs. 77,146 cr bids on Day 1

India's first auction of spectrum in five years attracted Rs 77,146 crore of bids on the opening day on Monday with Reliance Jio, Bharti Airtel and Vodafone Idea putting in bids. Over 2,250 MHz of spectrum, that carry telecom signals, in seven bands worth nearly Rs 4 lakh crore at reserve or start price, was offered for bidding in the auction that began on Monday.

Telecom Minister Ravi Shankar Prasad said Rs 77,146 crore worth of spectrum was bid on the first day but there were no takers for the airwaves in the premium 700 and 2500 MHz bands. The auction, he said, will continue on Tuesday. Bids were received in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz bands. About one-third of the spectrum being auctioned is in the 700 MHz band, which was completely unsold during the 2016 auctions.

This, analysts said, was mostly because operators are unlikely to diversify into a new spectrum band that would require incremental investment in equipment, when other sub-GHz bands are available at lower prices.

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