Bharti Airtel Ltd, Vodafone India, Idea Cellular Ltd and Reliance Jio Infocomm Ltd are among the seven telecom operators who have submitted applications to participate in the largest-ever spectrum auction slated for 1 October.
A total of over 2,300 megahertz (MHz) of spectrum, across seven bands—700Mhz, 800Mhz, 900Mhz, 1,800Mhz, 2,100Mhz and 2,300Mhz—worth around Rs.5.56 trillion at reserve price will be put on sale during the auction.
Reliance Communications Ltd, Aircel Ltd and Tata Teleservices Ltd have also submitted applications to participate in the auctions, according to people close to the development who requested anonymity. However, no new entity evinced interest to participate in the auction.
The seven telecom operators couldn’t be immediately contacted.
On 14 September, Reliance Communications and Aircel announced the merger of their wireless operations making it an Rs.65,000 crore entity.
The last date to submit applications by interested bidders was 14 September. The last date for withdrawal of applications is 22 September. As per budget estimates, the government expects to raise at least Rs.64,000 crore from the auction in this financial year.
The government had earned a revenue of Rs.1.trillion from the auctions held last year.
According to a recent report by rating agency Crisil Ltd, India’s telecom operators are likely to fork out about Rs.1 trillion to buy spectrum in the current auction.
According to experts, bidding for the 700MHz band, which is on sale for the first time and is considered most efficient band for 4G services, will be selective and operators will bid only for few circles to strengthen their existing spectrum portfolio, as reported by InfraCircle on 10 August.
In fact, a Credit Suisse note released on 8 August said, “We expect to see near-zero bidding for the 700MHz spectrum.”
However, given the stiff reserve prices for spectrum bands, the government has relaxed some rules.
To start with, new spectrum bands are available through a harmonisation process while spectrum caps happen to be easier in this auction as all unsold airwaves from past auctions, as well as surrendered spectrum, will be included here for calculation of spectrum caps.
The roll-out obligations are negligible as achievements on other bands in the past will be counted. Also, spectrum will be released within a month of payment and there will be easy financing for auction winners at 9.3% interest rate.
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