India’s biggest auction of telecom spectrum kicked off on Saturday morning.
Seven telecom network operators are in the fray for a total of 2,354.55 MHz across seven bands. The government has fixed a reserve price of Rs 5.66 lakh crore or nearly $85 billion for the 2,354,55 MHz spectrum.
The companies that are participating in the auction are Bharti Airtel, Vodafone India, Reliance Jio Infocomm, Reliance Communications, Idea Cellular, Aircel and Tata Teleservices — who have together furnished a total earnest money of Rs 14,653 crore.
The auction is central to the government realising the revenue target of Rs 98,994.93 crore that has been provided for in the budget against ‘other communications services’ — the bulk of which is scheduled from the fee paid for spectrum.
The auction timings are from 9 a.m. to 7.30 p.m., Monday to Saturday.
The 2,300-plus MHz of airwaves on the block for telecom operators are in seven bands — 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. In the previous auction 470.75 MHz was on offer, which is set to fetch the exchequer $17 billion during the tenure of licence, reports IANS.
According to Goldman Sachs predictions, the spectrum auction in 2016 will fetch bids worth around $7 billion against $16 billion that was fetched during the 2015 auction. India government aims to sell spectrum worth nearly $85 billion — based on the reserve price.
The telecom operators will have the choice of both upfront and instalments payment options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25 per cent upfront, and for those winning above that, the upfront payment will be 50 per cent.
Reliance Jio has deposited earnest money of Rs 6,500 crore, Vodafone Rs 2,740 crore, Idea Cellular Rs 2,000 crore and Bharti Airtel Rs 1,980 crore.
The Goldman Sachs noted that Bharti Airtel and Jio have much wider network coverage for wireless broadband as compared with Vodafone and Idea Cellular.
Goldman Sachs expects Bharti Airtel and Reliance Jio to buy additional 3G and 4G spectrum to augment data capacity on their networks.
The huge debt of Rs 3.80 lakh crore will be a big fact that is going to impact the business of telecom operators in India. Telecom industry associations are demanding for the rationalisation of taxes and other levies and a sharp cut in spectrum prices for the stability of the telecom sector.
