New Delhi, May 8 : India Saturday concluded 143 rounds of an auction to award spectrum for third generation (3G) telecom services in the country, with the government’s provisional revenue from the sale of airwaves reaching Rs.51,833.46 crore ($11.4 billion), which is well above the amount it expected.
The government had hoped to rake in Rs.55,000 crore ($12 billion) from both the 3G auction and the rolling out of broadband wireless internet services in the country. But with the agressive bidding in few circles, the government is poised to get more than the estimated amount from the 3G auction alone.
At the end of the 25th day of the auction, which began April 9, the provisional winning price for a pan-India 3G licence stood at Rs.12,850.66 crore ($2.82 billion), up around 267 percent from the Rs.3,500 crore reserve price.
Slots for three-four players are available in each of the 22 circles into which the country has been geographically divided for the 3G services, which will facilitate faster connectivity and enable applications such as Internet TV, video-on-demand, audio-video calls and high-speed data exchange.
Nine telecom companies – Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications – are participating in the online auction.
The government has already given Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) spectrum for 3G services on the condition that they pay the same licence fee as would be levied on private players after the auction.
Along with the fee that will be eventually paid by the two state-run enterprises for the licences, the government will provisionally get at least Rs.51,833.46 crore ($11.4 billion) from the auction.
According to the Department of Telecommunications (DoT), the 3G auction will conclude next week.
Data on the DoT’s website showed Mumbai continued to attract the highest bid at Rs.2,315.79 crore. The provisional winning price for Delhi stood at Rs.2,208.59 crore, followed by Karnataka at Rs.1,374.51 crore, Tamil Nadu at Rs.1,171.75 crore and Maharashtra at Rs.1,127.47 crore.
While Bihar, Mumbai, Delhi and Karnataka witnessed more players in fray than the number of slots available, Jammu and Kashmir, Haryana, Himachal Pradesh, Madhya Pradesh, West Bengal and the northeast still could not attract enough bidders.
This 3G auction is a simultaneous auction for the 22 circles over a secure website. At each round, the price is hiked from between 10-1 percent based on demand.
The auction is being held on all days except Sundays and national holidays. The bid data, including the winning companies’ names, will be made public after the auction’s completion and approval by the government.
The winning firms will have to deposit the money within 10 days after the auction and the successful bidders would be allowed to offer 3G services on a commercial basis from Sep 1.