The highly anticipated 2016 telecom spectrum auction began on 1st of October starting at 10 AM. The bidding went for 5 successful clock rounds (90 minutes each) till 7 in the evening with total bids reaching Rs. 53,531 crores.
In case you don’t know, the 2016 telecom spectrum auction has airwaves in 700 MHz, 800 MHz, 1800 MHz, 2300 MHz, and 2500 MHz for 4G services plus 900 MHz and 2100 MHz airwaves for 3G services. The spectrum of 2,354.55 MHz of all these bands combined is worth Rs. 5.63 lakh crores and is much more than the spectrum of the top 4 telecom operators combined.
The first day in this week long telecom spectrum auction received bids from the top 3 telcos- Airtel, Vodafone, and Idea plus the new entrant in the telecom market- Reliance Jio Infocomm. The popular 4G bands- 1800 MHz and 2300 MHz received the most bidding interest during the 5 rounds on Saturday while the highly coveted 700 MHz band didn’t find any takers!
It is worth noting that the 2300 MHz airwaves in LTE Band #40 is being auctioned for the first time since 2010. Airtel, Vodafone, and Jio bid very aggressively to gain spectrum in this affordable band. All the bids combined amounted to Rs. 15,390 crore for this band.
Aggressive bidding for the 1800 MHz band was seen for Maharashtra and Mumbai telecom circles as the airwaves for ‘Tata Teleservices Maharashtra’ are coming up for renewal in 2017. 1800 MHz spectrum was also in huge demand across Haryana, Kolkata, Rajasthan, and UP East telecom circles.
The 800 MHz band received great interest in the 4 telecom circles of Gujarat, Punjab, Rajasthan, and UP East.
The 2100 MHz band which is used to offer 3G services in the country received moderate interest.
The new 2500 MHz band also saw limited interest as the telecom operators are planning to use it only as a backup for the 2300 MHz band.
The highly coveted and most expensive 700 MHz band carrying a reserve price of Rs. 11,485/ MHz generated no interest at all despite the fact that offering 4G services in this band is 70% cheaper than the 2100 MHz band. The leading telcos requested the government to not auction the airwaves in this band as the market is not yet ready for it.
“The auction is on the expected lines- no bidding on 700 MHZ and 1800 MHZ showing interest and that too in the circle where there is some shortage. We should see some intensity over the next day or so and closure of the auction within the next week,” said Prashant Singhal, global telecom leader at EY.
The Government of India has fixed reserve price of Rs 2,873 crore for airwaves in 1,800 MHz band, Rs 3,341 crore for 900 MHz, Rs 5,819 crore for 800 MHz, Rs 3,746 crore for 2,100 MHz, Rs 11,485 crore for 700 MHz and Rs 817 crore each for 2,300 MHz and 2,500 MHz bands.
It would be interesting to know if the 2016 Spectrum Auction receives aggressive bids from other players like Telenor, RCom, Aircel, and the likes.