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Mega spectrum auction enters round 3: 1800 Mhz selling fast; no takers for premium 700 Mhz band

The Spectrum Auction Has Entered The Third Round, With Activity In 2100 MHz, 2300Mhz And 2500 Mhz Bands And Most Of The Action Is Seen In 1800 Mhz Band. There Is No Activity Yet In The Premium 700 Mhz Band, According To Industry Sources.

News Nation Bureau | Edited By : Arshi Aggarwal | Updated on: 01 Oct 2016, 04:33:34 PM

New Delhi:

The mega specturm sale has entered round three with activity in 2100 MHz, 2300Mhz and 2500 Mhz bands. Most of the action is seen in 1800 Mhz band. There is no activity yet in the premium 700 Mhz band, according to industry sources. 

Maximum activity is taking place in 1800 MHz band, especially for the Mumbai circle, they said, adding that 10 bids have been received in the 2100 MHz band for all the 10 slots on the offer. 

Earlier in round 2, the telecom operators started bidding for airwaves in the country's largest airwave auction in which bands worth Rs 5.63 lakh crore have been put up for sale on Saturday. 

According to sources, all participants placed bids in the first round. Industry players have called the base price of airwaves in the auction as "unreasonably priced". 

Seven major telecom service providers are in the fray for the next generation premium airwaves in the 700 Mhz band. Reliance Jio, Bharti Airtel, Vodafone, Idea Cellular, Tata Teleservices, Reliance Communications and Aircel have submitted their bids for the sale. 

Despite recent annuncements of merger, Reliance Communications and Aircel will participate in the spectrum auction indpendently.  

Along with 700 Mhz, a total of 2,354.55 megahertz (MHz) of frequencies are being put up for auction in seven bands also including 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz, 2300 Mhz and 2500 MHz. The radiowaves can be used for 2G, 3G and high-speed 4G mobile services.

There is no end limit set by the government for the auction, but the bidding will be between 9 am to 7 pm everyday except on Day 1 when it started at 10 am. 

The department of telecom will release results of daily bidding at the end of every day.

This is considered as the most premium spectrum as the cost of providing service is one-third of 3G under the 2100 Mhz band. But the band comes at a steep price. A company interested in buying spectrum in the 700 MHz band will need to shell out a minimum of Rs. 57,425 crore for a block of 5 MHz on a pan-India basis.

The band on sale has potential to fetch bids worth Rs 4 lakh crore if all the spectrum in it gets sold at the base price although most analysts have predicted a muted response in this band, given the exorbitant pricing. 

Telecom majors Bharti Airtel, Vodafone and Idea Cellular were the first ones to submit their bids by September 14. However the competition stiffened after new player in telecom market reliance Jio also entered the fray. According to reports, following launch of Jio servoices launch, nationwide 4G network has become crucial for all service providers. 

This is more than the cumulative spectrum holding of the top four operators. 

While Jio, Airtel and RCom have pan-India 4G spectrum, Vodafone and Idea Cellular have an opportunity to bid for airwaves to expand their 4G service footprint for competitive advantage in the market.

Idea has 4G spectrum in 10 out of 22 telecom circles in the country. Vodafone, which has just brought in Rs 47,700 crore equity investment from its parent firm, has spectrum for 4G services in 9 telecom circles. 

Government has fixed a pan-India reserve price of Rs 2,873 crore for spectrum in 1,800 MHz band, Rs 3,341 crore for 900 MHz, Rs 5,819 crore for 800 MHz, Rs 3,746 crore for 2,100 MHz, Rs 11,485 crore for 700 MHz and Rs 817 crore each for 2,300 MHz and 2,500 MHz bands. 

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First Published : 01 Oct 2016, 11:05:00 AM

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Mega Spectrum Auction