While the bids for 3G reached Rs16,828 crore for pan-India licence against the reserve price of Rs3,500 crore, the bids for BWA have already gone over five times the reserve price
The Indian government is witnessing a windfall with the robust response to e-auction for the third generation (3G) spectrum and for broadband and wireless access (BWA). While the 34-day auction for 3G saw bids reaching Rs16,828 crore for a pan-India licence against the reserve price of Rs3,500 crore, the bids for BWA have already gone over five times the reserve price.
According to details provided by the Department of Telecommunications (DoT), as of Wednesday (2nd June), 62 rounds of bidding have been completed. On its eighth day, the bidding price for BWA touched Rs8,604.14 crore as against the reserve bid price of Rs1,750 crore. With this price, the government is assured of receiving revenue of Rs25,812 crore as against its expectation of Rs15,000 crore.
BWA spectrum is necessary for companies to roll out worldwide interoperability for microwave access (WiMAX) services that enable handheld devices and laptops to access the Internet. There are three pan-India slots for BWA spectrum with one slot reserved for the State-run telecom player in each circle. This leaves 11 companies fighting for two slots of 20MHz BWA spectrum.
As many as 11 companies-Bharti Airtel, Reliance WiMax, Idea Cellular, Aircel, Augere Mauritius, Infotel Broadband Services, Qualcomm, Spice Internet Service Provider, Tata Communications Internet Services, Tikona Digital Networks and Vodafone Essar-are participating in the BWA auction.
The government has already allocated one block of 20MHz of unpaired spectrum each to its units Mahanagar Telephone Nigam Ltd (MTNL) and Bharat Sanchar Nigam Ltd (BSNL) in their respective service areas. Both MTNL and BSNL will have to pay the winners' price.
The successful bidders in the BWA auction can use the assigned frequency for commercial purposes immediately after they get the spectrum.
Coming back to the e-auction, at the end of 62 rounds, bids for Delhi and Mumbai reached Rs1,304.66 crore each. They were followed by the Tamil Nadu circle with a bid of Rs1,197.95 crore while the bid for Maharashtra stood at Rs915.64 crore; Gujarat at Rs528.82 crore; Andhra Pradesh at Rs894.39 crore and Karnataka at Rs947.92 crore.
While there is excess demand in three circles-Tamil Nadu, Punjab and Rajasthan-for 12 circles there is negative demand while there is no demand in seven circles.
Earlier this week, nine telecom companies, including Bharti Airtel, Reliance Communications, BSNL and MTNL together paid Rs67,719 crore to the government as licence fees for 3G spectrum.