Action in Delhi, Mumbai 3G bidding picks up during weekend

After reaching an equilibrium early last week, bidding for 3G (third generation) spectrum in the A circle saw a renewed thrust towards the weekend. And the confirmed stars in this circle were New Delhi and Mumbai, with just a difference of Rs 3 crore between their provisional winning prices during the auction.

Having settled at three bidders each in New Delhi and Mumbai some days ago, the level of demand has shot up once again with four to five telecom firms participating in the precious A circle geographies. The 3G auction has completed 13 days of active bidding already, and there’s no sign of stopping. And broadband wireless access (BWA) bidding is yet to start.

While the government had targeted Rs 35,000 crore of revenue in the union budget from the auction of 3G and broadband wireless access (BWA) spectrum, the final mop-up would far exceed the target. This revenue would help the government bridge the steep fiscal deficit.

At the end of Day 13 and after 76 rounds of bidding, the highest pan-India bid price for a telco was Rs 7,900.48 crore, which is 125.7% higher than the overall reserve price of Rs 3,500 crore.  
Within the A circle, Delhi is leading with the provisional winning price of Rs 1,083.27 crore, followed very closely by Mumbai at Rs 1,079.93 crore. At one point during the auction, Mumbai had slipped to the bottom of the A circle ladder, but the high-worth metro bounced back to the top league towards the weekend.

Gujarat, which showed much promise during the initial days of bidding, is now at the bottom of the A circle with the provisional winning price of Rs 631.65 crore. Others in the A circle include Maharashtra at Rs 769.10 crore, followed by Tamil Nadu at Rs 746.84 crore, Karnataka at Rs 691.34 crore, and Andhra Pradesh at Rs 685.16 crore. The reserve price for the A circle is Rs 320 crore.

In the B circle, Uttar Pradesh (west) continues to lead at a winning bid price of Rs 300.57 crore, followed by UP (east) at Rs 257.51 crore, Kerala at Rs 256.18 crore, Rajasthan at Rs 247.98 crore, Kolkata at Rs 241.16 crore, Madhya Pradesh at Rs 236.27 crore, Haryana at Rs 218.20 crore, Punjab at Rs 144.88 crore and West Bengal at Rs 123.63 crore. The reserve price for B circle is Rs 120 crore each.

In the C circle, the bids are still moving around the reserve price of
Rs 30 crore each. The reserve price set by the government for pan-India 3G spectrum is Rs 3500 crore for an operator and Rs 1,750 crore for BWA.

The auction process would close once all the circles achieve equilibrium, which is the number of slots available equal the number of bidders.

3G auction would facilitate high-speed mobile services in the country. It is a simultaneous auction of 22 service areas over a secure website. The auction has multiple rounds, and it could be spread over several weeks.

Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices and Aircel are bidding for all-India 3G spectrum. Etisalat, S Tel and Videocon Telecommunications are bidding only for some circles.