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Spectrum: will it be windfall now?

The ‘real excitement’ in the auction will be from today

The bidding trend on the first day of auction on Monday makes experts believe that the Union government would collect well above the expected Rs.11,000-Rs.12,000 crore for the 385-MHz spectrum in the 1,800-MHz band and 46 MHz in the 900-MHz band. Aggressive bidding is taking place for the 900-MHz band in three circles.
The total target, which includes a one-time spectrum charge and the annual regular licence fee, has been set at over Rs. 40,000 crore.
“The heartening news for the government is that it got bidders for all the spectrum that has been put on sale. The auction process will now gain momentum, particularly once the bidding for Delhi, Mumbai and Kolkata is settled. On the first day, the bidding companies gauge the mood of their competitors and decide how to spend the money they have kept for bidding … The real excitement will be from tomorrow,” said a senior Department of Telecom official.
Delhi, Mumbai and Kolkata are crucial for old GSM players such as Bharti Airtel and Vodafone India, whose licence for these circles expires in November this year. With the Telecom Department and the Supreme Court not listening to their pleas to renew their licences without auction, they have no option but to bid aggressively to save their services in these circles.
The government is conducting the auction following a Supreme Court order in the 2G case. The auction is likely to continue for four or five days. The successful 3G spectrum auction in 2010, by which the government earned over Rs. 65,000 crore, lasted 34 days, but the much-hyped bidding in November 2012 lasted just two days with the government earning Rs. 9,407 crore against the expected collection of Rs. 28,000 crore. In the bidding in March 2013, only Sistema Shyam Teleservices, a CDMA operator, bought radio waves estimated at Rs. 3,600 crore in eight of the 22 telecom circles.

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