India's Spectrum Auction Reaches $8.5 Billion in Bids
Published on: 7th Feb 2014
By: Ian Mansfield
India's radio spectrum auction is still ongoing having lasted longer than expected and prices are inching ever closer the rates paid back in 2010 for the 3G licenses.
The third round on Friday took place with demand still exceeding supply in Assam, J&K, MP, West Bengal, UP (E) and UP (W), and Delhi seeing a marked surge in interest.
At the end of Thursday, total bids came in at around Rs 52,689 crore (US$8.5 billion), made up of Rs 30,754 for the 1800Mhz spectrum and Rs 21,935 crore for the 900Mhz spectrum.
The high prices being offered will be a relief to the government following the two previous auctions which barely covered the reserve prices.
The price of 900 Mhz spectrum in Delhi jumped by nearly 80% to Rs 639.24 crore per megahertz as compared to the reserve price of Rs 360 crore. In Mumbai, the 900 Mhz spectrum increased by 72 percent to Rs 563.09 crore per Mhz and in Kolkata by 54 percent to Rs 192.71 crore.
Bidding on the three cities is likely to be more intense as the spectrum is already owned by three big mobile networks, Airtel, Loop Mobile and Vodafone. They are expected to bid aggressively to retain their spectrum, while at the same time fighting the government in the courts to ensure their existing licenses are automatically renewed.
If the court agrees with the companies, then the high prices they are bidding at the moment will be cancelled, and they will only have to pay a price to be negotiated with the government afterwards.