News Business Spectrum auction ends with bids worth Rs 65,789 cr in 5 days, no takers for premium bands

Spectrum auction ends with bids worth Rs 65,789 cr in 5 days, no takers for premium bands

Telecom spectrum auction ended today with bids worth Rs 65,789 crore over the last five days, around 40 per cent of mobile radiowaves put up for sale

Spectrum auction, Spectrum, 2G spectrum, telcos Image Source : REPRESENTATIONAL IMAGEThe spectrum had a capacity to garner as much as Rs 5.6 lakh crore

Telecom spectrum auction ended today with bids worth Rs 65,789 crore over the last five days, around 40 per cent of mobile radiowaves put up for sale with no takers for the premium 700 Mhz and 900 Mhz bands.

The spectrum had a capacity to garner as much as Rs 5.6 lakh crore at the reserve price but the government expected the actual numbers to be 15-20 per cent higher than that. 

There were no takers for the expensive 700Mhz and 900 Mhz bands during the course of the five days. The 700MHz band alone was expected to fetch Rs 4 lakh crore for the government. 

"Bids worth about Rs 65,789 crore were received at the end of 31 rounds for 965 Mhz of spectrum out of total 2,354.55 Mhz put for auction," official sources told PTI. 

The auction on the first day had closed with bids worth Rs 53,531 crore. 

Around 60 per cent of mobile airwaves in value terms remained unsold in what was billed as the country's largest spectrum auction where Rs 5.63 lakh crore worth of spectrum was put up for sale from October 1. 

Earlier in the day, total bids had dipped a bit to about Rs 63,325 crore at the end of 26th round as compared to previous closing. Activity, however, picked up pace in the later rounds. Each round today was of 45-minute duration, unlike 60 minutes on the previous days. 

The bidding activity took place only in few circles with interest continuing to be largely around 1800 MHz and 2300 MHz that can be used by operators to provide 4G services. 

Industry also showed interest in the bands of 800Mhz, 1800Mhz, 2100Mhz, 2300Mhz and 2500Mhz.

The higher the frequency, the lower is its pricing as coverage and efficiency tapers with increase in spectrum band value. 

The demand for mobile airwaves trickled in for select circles like Mumbai, UP East and West and Gujarat. 

The debt-ridden telecom industry was cautious in the auction and opted for low-priced spectrum that will help them improve mobile service quality as well offer next generation services in the world's second largest telecom market. 

As per rating agency ICRA, the consolidated debt level of the industry stood at around Rs 3,80,000 crore in December 2015 against Rs 2,90,000 crore in March 2014.

In run-up to the auctions, debt-ridden telecom companies had said that regulator TRAI failed to read market realities before fixing the price. The TRAI suggests the initial reserve which is the base for the final prices are determined by the government.

(With PTI inputs)

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