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2G spectrum auction a success, govt nets Rs 61,000 cr

Friday, 14 February 2014 - 6:00am IST | Place: New Delhi | Agency: DNA
Existing players retain spectrum in key circles, enhance data capabilities

The 2G spectrum auction which concluded on Thursday after 10 days of cautious bidding turned out to be a success with the government netting a whopping Rs 61,162.22 crore.

All the spectrum in the 900 MHz band was sold out with only 20% spectrum left in the 1800 MHz.

The earnings from the 1800 MHz band stood at Rs 37,572.62 crore and that from 900 MHz was Rs 23,589.62 crore.

Of the total amount, the government is likely to get a minimum of Rs 18,296.36 crore this fiscal as upfront payment.

While Bharti Airtel was upset at the high price and less spectrum on sale in the 900 MHz auction, Vodafone was content about retaining its 900 MHz spectrum in Mumbai, Delhi and Kolkata.

"The auction in 900 MHz band resulted in artificial and unrealistic prices on account of shortage of spectrum and the unenviable position of the incumbents who were forced to bid for this spectrum to protect the interest of their customers and the huge investments made by them," Bharti Airtel, which bagged spectrum in the 900 MHz band in all the three circles -- Mumbai, Delhi and Kolkata.

Reliance Jio Infocomm, another biggie, was not aggressive in bidding, bagging spectrum in just 14 circles, and that too only in the 1800 MHz band.

Idea Cellular bagged spectrum in the 900 MHz only in the Delhi circle.

Vodafone spent Rs19,600 crore to retain existing 900 MHz spectrum in Mumbai, Delhi and Kolkata besides buying spectrum in 1800 MHz in 11 circles -- Mumbai, Delhi, Kolkata, Karnataka, Kerala, Gujarat, UP East, Rajasthan, Haryana, Andhra Pradesh and Punjab.

Out of this Rs 5,600 crore will be payable this fiscal.

With this, Vodafone has enhanced its data capabilities significantly by buying 4G spectrum for the next generation of mobile services in Mumbai, Delhi, Kolkata, Karnataka and Kerala.

Bharti Airtel acquired 115.0 MHz spectrum of spectrum for Rs.18,530 crore.

It will make an upfront payment of Rs.5,425 crore.

The company plans to roll-out high speed 4G networks in various circles using FD-LTE technology in the 1800 MHz band besides its existing TD-LTE roll-out in the 2300 MHz band, giving it a pan-India 4G footprint, it said.

Uninor, a smaller player, acquired additional spectrum in the 1800 MHz band in four of its six existing circles and in the new circle of Assam at an investment of Rs 844.7 crore.

With this, Uninor will be able to enhance its voice and data capacity 20-25% in the four existing circles.

The government will take a call separately so as to what is to be done to the spectrum left in the 1800 MHz band.

However, the industry remained concerned about the financial stress this spectrum sale will bring into the balance sheets of the players.

"The auction has raised over Rs 61,000 crore for the government, but much of this will end up as debt on the balance sheets of the mobile operators. Such high industry indebtedness will hurt operators' ability to invest in the roll out of new technologies and invariably result in higher prices and reduced service levels for consumers," Marten Pieters, managing director and CEO, Vodafone India, said.

"Spectrum remains unsold in only a handful of circles. However, the industry is still spectrum starved compared with other countries and the appetite for spectrum in India remains high. To meet the ambitious broadband objectives more spectrum should be made available in all bands on reasonable terms," he said.


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