Spectrum auction ends: Government to get Rs 1.10 trillion; rates may rise
New Delhi: Government raised a record Rs 109,874.91 crore in the country's biggest and the fiercest auction of telecom spectrum that ended on March 25, triggering fears of hike in call and data rates.
Incumbents Airtel, Idea and Vodafone bid aggressively to protect their businesses as new players like Reliance Jio participated in the auction that lasted 19 days and saw 115 rounds of bidding among eight operators.
"Today spectrum auction has concluded at Rs 1,09,874 crore. This is highest ever in history of India. The spectrum auction conducted in 2010 brought about Rs 1,06,000 crore which included Rs 30,000 crore payment from BSNL and MTNL. This time all amount is non-BSNL, non-MTNL money," Telecom Minister Ravi Shankar Prasad said.
In two of the spectrum bands, prices jumped by over two-fold in some circles. The fierce bidding is likely to lead to rise in call, SMS and data charges as operators pass on the cost of spectrum to consumers.
"The auction was designed to extract maximum from telecom operators else why would someone create scarcity of spectrum. Financial and cost structure of industry has been completely altered. Consequently tariff will have to be increased to meet commitment to government," industry body COAI Director General Rajan S Mathews told PTI.
The auction included spectrum in 900 Mhz band — that is being used by Airtel, Vodafone, Idea Cellular and Reliance Communications under their licences expiring in 2015-16. Government has put 470.75 Mhz of spectrum for auction of which about 11 per cent remained unsold which also included 800 Mhz, 1800 Mhz and 2100 Mhz (3G) band Maximum bids came of Rs 72,964.54 crore was received for spectrum in 900 Mhz band.
At base price fix by government the value of 900 Mhz frequency that attracted bids was about Rs 37,841 crore. The 800 Mhz spectrum worth Rs 9,710 crore at base price got sold at premium price of Rs 17,158.79 crore. The 3G spectrum and 1800 Mhz spectrum contributed Rs 10,115.41 crore and Rs 9,636.17 crore respectively against their value of Rs 9,620 crore and Rs 8,292.4 crore.
Names of the winners, however, have not been disclosed due to court orders. The Supreme Court may tomorrow rule on multiple cases questioning auction guidelines and criteria. Depending on the band, carriers will have to pay as much as 33 per cent of their final bid within 10 days of the auction's conclusion and the rest in 10 annual instalments starting in 2017.
The permits will be valid for 20 years. Vodafone India said: "We participated in the recent spectrum auction to ensure continuity of business and service to our customers ... We will make a further announcement once the DoT announces the results of the auction."
