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Demand for cheaper 1800 MHz band outstrips 900 MHz at 2G auction

Thursday, 6 February 2014 - 9:52am IST | Place: New Delhi | Agency: DNA
Govt nets Rs50,000 crore so far.

Demand for spectrum in the 900 MHz band of the Delhi circle witnessed excess demand while Mumbai and Kolkata with the same bandwidth met with limited response as they shifted focus to 1800 MHz bad that was much cheaper.

Bihar, Assam, and West Bengal circles as well which till yesterday had few takers saw a massive spurt in bids for the 1800 MHz band.

The auction into its third day on Wednesday, had seven rounds concluding the day adding up to 21 rounds so far and assuring the exchequer of Rs 50,000 crore to its kitty.

MF Farooqui, telecom secretary said that the government will get at least Rs 15,000 crore this fiscal as against the budgeted Rs 11,500 crore earlier.

Given the interest by players, most analysts believe the auction could stretch over till the week end.

In circles such as Bihar and Assam where the demand has been far more, analysts said players are looking for regions where business potential is quite high due to poor penetration.
“These areas are under-penetrated and have huge revenue potential for players,” said an analyst.

Reliance Jio Infocomm, which is bidding aggressively in the auctions, is also rumored to commence its 4G operations in the northeast belt.

“Operators are securing enough spectrum as there is no clarity on when and how much spectrum the government would release in the 700 MHz band, hence the rush of the 1800 MHz band,” said another analyst who is also an advisor to a top telecom company.

Besides the price factor, 1800 MHz band is also technology agnostic or neutral. The device and equipment eco-system is much better in this band than other bands for LTE globally, he added.

The earlier two auctions which took place in November 2012 and March 2014 evoked dismal response.

The current auction witnessed a promising start with excess demand coming up for the 900 MHz band in the Mumbai circle with the provisional winning amount per block being Rs 473.24 crore at the end of the seventh round of the spectrum auction on Monday.

The reserve price for a pan-India licence is at Rs 1,765 crore per MHz, about 26% lower than the March sale.

A total of over 385 MHz of spectrum has been put up for auction in the 1800 MHz band while in the 900 MHz band 46 MHz of spectrum has been put up for auction.
The auction has eight players fighting for the airwaves.

2G spectrum auction provisional bid amount in Rs crore on day 3
900 MHz    20,000
1800 MHz  30,000
Total          50,000

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