India’s largest-ever spectrum auction kicked off on Saturday with major telecom operators placing bids worth Rs 53,531 crore across bands, even as the premium 700 Mhz and 900 Mhz frequencies did not find any buyer.
As much as 2,354.55 megahertz of frequencies are being put up for auction in seven bands valued at Rs 5.63 lakh crore at base price.
The airwaves auction on Saturday saw total bids of worth around Rs 53,531 crore after five rounds, official sources said.
The spectrum auction, where seven telecom companies including Bharti Airtel, Vodafone, Idea Cellular and Reliance Jio are in fray, will resume on Monday.
The other telecom players in the fray are Aircel, Reliance Communications and Tata Teleservices.
Telecom Secretary J S Deepak had on Friday said that after this auction the “problem of spectrum scarcity affecting quality of service will be history”.
He had also advised operators to “tank up” the radiowaves to bridge shortfall in their holdings as the next such sale may not happen for “quite some time”.
According to data released by the Department of Telecom, five bidding rounds took place today with operators showing more interest in 1800 Mhz band — a frequency that can be used for delivering 2G/4G services.
Operators also placed bids for spectrum in 2100 Mhz (3G/4G) band, 2500 Mhz (4G) band, 2300 Mhz (4G) and 800 Mhz (2G/4G) bands too.
Maximum action was seen in 1800 Mhz band — earlier known as 2G spectrum — with bidding in 19 of 22 telecom circles including Delhi, Mumbai, Kolkata, Gujarat and UP (East and West).
Telecom operators are in the race to arm themselves with spectrum to maintain competitive edge in providing quality and next generation mobile services to consumers in the world’s second largest telecom market.
The 2100 Mhz used for 3G services saw demand in 9 out of 22 telecom circles including Delhi, Rajasthan, Bihar and UP East.
The spectrum band of 2300 Mhz and 2500 Mhz, which went under the hammer after six years, also witnessed demand in various circles. The 800 Mhz frequency saw activity in circles of Gujarat, Punjab, UP (East) and Rajasthan.
The premium 700 MHz band is to be auctioned at a reserve or base price of Rs 11,485 crore per Mhz. The cost of delivering mobile services in this band is estimated to be around 70 per cent lower than 2100 MHz used for providing 3G services.
A company interested in buying spectrum in 700 MHz band will need to shell out a minimum of Rs 57,425 crore for a block of 5 Mhz on a pan-India basis. This band alone has the potential to fetch bids worth over Rs 4 lakh crore.
However, there were no interest shown by operators in this band on the first day of auction.
In 2015, mobile airwaves auction attracted bids worth around Rs 60,000 crore after six rounds of bidding on Day 1 against the government’s expectation to raise over Rs 82,000 crore from that auction.
The auction in 2015, which closed after 19 days, fetched the government around Rs 1.1 lakh crore.