Telcos Deposit Rs 14,653 cr For Largest Ever Spectrum Auction

Leading telecom operators have deposited Rs 14,653 crore as earnest money for the country's largest ever spectrum auction from October 1, with Reliance Jio alone submitting Rs 6,500 crore.

As per the information released by the Department of Telecom today, with Rs 6,500, the Mukesh Ambani-led firm is eligible for placing bids in any of the 22 telecom circles in the country and in any spectrum band. Vodafone India has submitted EMD of Rs 2,740 crore, Idea Cellular Rs 2,000 crore and Bharti Airtel Rs 1,980 crore. These companies too are eligible for bidding in any circle.

Representative picture. Reuters

Earnest Money Deposit (EMD) is indicative of a company's strategy to bid in specific circles and spectrum bands. It gives them eligibility points with regard to those circles. Reliance Jio, as per the information, is only company which has potential to buy spectrum in premium 700 Mhz at floor price in most of the circles as a pan-India bidder for 700 Mhz spectrum needs to have EMD of Rs 5,610 crore.

This is the first time that government will auction the 700 Mhz band, considered to be the most premium as the estimated cost of providing service through it is about one-third of 3G under the 2100 Mhz band. A firm opting to buy spectrum in 700 Mhz band will need to shell out a minimum of Rs 57,425 crore. Total spectrum worth Rs 4,01,975 crore in 700 Mhz band is being put up for auction.

Tata Teleservices has submitted EMD of Rs 1,000 crore, Reliance Communications Rs 313 crore, and Aircel Rs 120 crore. Mobile frequencies in all bands -- 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz -- will be put on the block in the upcoming auction. All the radiowaves being put up for auction can be used for providing high-speed 4G services.

The Finance Ministry in the Budget pegged the revenue target at Rs 98,995 crore from the telecom space, which includes Rs 64,000 crore from the auction of about 2,354.55 Mhz of spectrum and the rest from various levies and services this financial year.

As per DoT, Tata Teleservices can bid for spectrum in all bands in Mumbai and Maharashtra circles, and 800 Mhz band (known as CDMA service band) across all circles except Assam and North East (NE), and 900 Mhz in all circles barring Assam, NE and Delhi. It can bid for 3G spectrum in Gujarat, Haryana, Karnataka, Kerala, MP, Maharashtra, Mumbai, Punjab, Rajasthan and UP (West). It is not eligible to bid for premium 700 Mhz band spectrum except in Mumbai and Maharashtra.

Similarly, there are host of restriction on bidding eligibility of Aircel. It cannot bid for spectrum in premium 700 Mhz, 800 Mhz, and 2500 Mhz in any of the circle. The company has been found to be ineligible for bidding in 13 out of 22 circles for 3G spectrum which include Tamil Nadu, Uttar Pradesh (East), Andhra Pradesh, Bihar, Karnataka etc. It can only bid for spectrum in 900 and 1800 Mhz band across all circles. Anil Ambani-led Reliance Communications is eligible to bid for spectrum across country except North East and Assam.

Reference - http://www.firstpost.com/business/telcos-deposit-rs-14653-cr-for-largest-ever-spectrum-auction-3011774.html