The most awaited event of the year the spectrum auction has finally taken place and till now it has managed to garner bids worth Rs 96,000 crore. The telecom operators are bidding very aggressively and the reason behind the same is the expiry of their licences and the shortage of the spectrum. The price for 900 MHz had gone to 85 percent higher against its reverse price. On the other hand, the price of other three bands (800/1800/2100MHz) rose only by 2-6 percent. However, this aggressive bidding brings along a fear of hike in the telecom tariffs as the telcos are paying a high price for the spectrum.
We bring for you 10 facts about this fierce and interesting spectrum auction.
The 10 Facts
- The spectrum put to auction by the government is presently held by Airtel, Vodafone, Idea Cellular and Reliance Telecom. The permit of these telcos is set to expire in some of the circles and it becomes a compulsion for them to win the spectrum this time. This is considered as one of the reason behind the aggressive bidding.
- The mobile licences for Idea Cellular’s 9 circles, Airtel’s 6 circles and 7 circles each of Vodafone and Reliance Telecom are coming up for renewal. All together 29 licences in 18 service areas will expire in 2015-16. This affects nearly 80 percent of the subscriber base of the service providers.
- Eight telecom companies are in the list of bidders for the spectrum auction this time. The list also incorporates the Mukesh Ambani owned Reliance Jio. On the other hand, telecom operators like MTS and Videocon decided not to participate in the spectrum auction because of the high reserve price finalised by the government
- Sunil Mittal the chairman of the leading service provider Airtel has indicated that the spectrum auction might create a financial pressure on the telecom companies, which can lead to the increase in the tariff prices. Mittal stated, “It (spectrum auction) puts pressure on balance sheets… may result in rise in tariff.”
- According to the auction norms, the telcos who turn out to be successful bidders will have to make the payment of 25 to 33 percent of the final sale price of the spectrum. This will enable the government to gather Rs 25,000 crore immediately via the current round of spectrum.
- The eight telecom operators in the list of bidders together have deposited the amount of Rs 20,435 crore as the earnest money for the auction of the radiowaves. Reliance Jio which has to roll out 4G services in the country his year has deposited the highest amount of Rs 4,500 crore followed by Airtel with Rs 4,336 crore.
- The government has put to sale 380.75 MHz of 2G spectrum which comprises of all the three spectrum bands of 900 MHz band, 1800 MHz and 800 MHz. The total also incorporates 5 Mhz in the 2100 Mhz band, or 3G spectrum, has been put up for auction.
- For the spectrum auction of 2015 the government has finalised the base price of Rs 3,646 crore per Mhz for the 800 MHz spectrum band and Rs 3,980 crore for the 900 MHz band (excluding the telecom circles of Delhi, Mumbai, Kolkata and J&K). Along with this, it has set the base price of Rs 2,191 crore for the 1,800 MHz band and Rs 3,705 crore for 2,100 MHz spectrum band.
- The government will not be able to disclose the results of the spectrum auction of 2015 because of the court ruling. The Supreme Court of India has earlier allowed the government to go to ahead with the spectrum auction subject to certain riders. Hearing a case against the government’s auction conditions, the apex court stated that, the outcome of the telecom spectrum auction will be subject to its final ruling. The top court will hear the matter on March 26.
- As per the agency inputs, the government had raked in Rs. 62,162 crore from the last spectrum auction in February 2014. (With Agency Inputs)