Mukesh Ambani’s Reliance Jio Infocomm among the companies bidding for 2G spectrum auction

Mukesh Ambani-led Reliance Jio Infocomm, erstwhile Infotel Broadband Services Pvt Ltd, has also applied to bid for spectrum in the 900-MHz and 1,800-MHz bands across the country in the fresh auction scheduled to start on February 3, making its full-fledged entry and setting stage to compete with the existing players like Bharti Airtel, Vodafone India and Idea Cellular.

Reliance Jio already has a pan-India licence for 4G broadband and a unified licence to offer VoIP which allows it to offer mobile telephony, but has still applied for bidding. This implies the auction could see aggressive bidding.

Other telecom companies that have applied to bid are Reliance Communications, Tata Teleservices, Vodafone, Airtel, Telewings (Uninor) and Idea Cellular, media reports said.

With Reliance Jio making its foray as a prospective bidder, the auction will witness intense bidding in key circles like Delhi and Mumbai, since the existing major players like Bharti and Vodafone will be bidding aggressively to retain their spectrum in the 900 MHz band which is considered most cost-efficient.

Notably, the auction of spectrum in 900 MHz band in Delhi, Mumbai and Kolkata circles is crucial for operators like Bharti and Vodafone as the government has asked them to surrender spectrum in this band after their current licences in this band expire in November this year.

The companies either can bid and win back the spectrum or can get 1,800 MHz as an alternative.

The last date to submit the application to bid in the 2G spectrum auction was January 15. The companies, however, have an option to withdraw their application, if they wish to, by January 27.

After receiving lukewarm response in the last auction held in March 2013, wherein none of the GSM operators had applied for spectrum citing higher base price, the government has cut the base price about 26 per cent lower than the March sale to Rs 1,765 crore per MHz in the 1800 MHz band across the country, in a bid to get good response this time.

Also, the government has reduced the price in 900 MHZ to Rs 360 crore per MHz for Delhi, Rs 328 crore for Mumbai and Rs 125 crore for Kolkata, which is up to 53 per cent lower than the base price for spectrum sale in March.

Meanwhile, Telecom Secretary MF Farooqui said that the government is expected to garner over Rs 11,343 crore from the fresh spectrum sale.

Nearly 45 MHz are being put up for auction in 900 MHz and 403 MHz in 1800 MHz. An operator is required to buy a minimum of 5MHz of spectrum.

However, eight companies—including Loop Telecom, Videocon Telecom and Russia's Sistema-owned Shyam Teleservices—have been barred from participating after their licences were squashed on February 2, 2012 in 2G scam. The spectrum freed after cancellation of 122 licences, including those of Videocon and Sistema are being put up for auction.

(Edited by Joby Puthuparampil Johnson)

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