04:45 pm - Saturday 29 April 2017

Spectrum auction enters third day

By insightVAS - Wed Feb 05, 2:14 pm

The third round of spectrum auction has entered the third day with eight companies in contest for two  sets of airwaves frequencies that can be used for 4G services.

“Auction has started. There are excess demand in 900 Mhz band and we expect the momentum to continue,” a DoT official said.

On second day, telecom companies put in bids worth a total of about Rs 45,000 crore that brings hope for the government to curb fiscal deficit. The fiscal deficit at Rs 5.16 lakh crore has crossed 95 percent of budget target in the first nine months of 2013-14.

Now, even if bidders opt to pay the final auction price in instalments, the government will get at least Rs 11,790 crore, exceeding the target of collecting Rs 11,343 crore in upfront payments.

Telecom Minister Kapil Sibal has attributed demand of airwaves to rationalisation of base price which was about seven times more than the price of Rs 1,658 crore at which telecom companies were given pan-India permits between 2001 to 2008.

The government set a pan-India rate of Rs 1,765 crore per MHz as the start price for spectrum in the 1800 MHz band, which is about 26 percent lower than the base rate in the March 2013 sale, where there were no takers for GSM airwaves. For the 900 MHz band, it approved a rate that is about 53 percent lower than the March auction price.

The Telecom Regulatory Authority of India (TRAI) had recommended a minimum price of Rs 18,000 crore for 5 MHz of pan-India spectrum in the 2012 auction, Sibal had said at the time.

This followed the Supreme Court order of February 2012, asking for procedure to be followed in 3G auction.

However, even after the government cut the recommended reserve price to Rs 14,000 crore, the November 2012 auction ended in two days, with bids of about Rs 9,407 crore received for airwaves worth Rs 28,000 crore.

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