Indian operators start bidding for 3G spectrum

12 Apr 2010

The auction for third generation spectrum in India is fully underway, with the first two days of bidding having been completed, and the third due to take place today. After a number of false-starts and delays over the years, nine operators are competing for 3G spectrum in the auction process: Bharti Airtel, Reliance Communications (RCOM), Vodafone Essar, Idea Cellular, Tata Teleservices (TTSL), Aircel, Etisalat, STel and Videocon Telecommunications, are participating in the online auction process being held daily (except Sundays and national holidays). Of those, Bharti, RCOM, Vodafone Essar, TTSL, Idea and Aircel are bidding for pan-India spectrum, while the remainder are targeting selected circles only.

The auction process will see simultaneous bidding for all 22 of India’s telecoms circles take place online, with the sale taking place over multiple rounds. During the e-auction telcos will have to match the base price, set at INR35 billion (USD750 million), and during each round the price is expected to rise by up to 10% against the previous round’s price, dependent on demand. The auction process itself will conclude when the demand is equal to the number of slots available in each circle, and as such there is no specific date for the sale to close, although it has been estimated that it will conclude in around two weeks. Of the country’s 22 telecom regions, five – Punjab, Bihar, West Bengal, Himachal Pradesh and Jammu & Kashmir (J&K) – will have four 3G concessions up for grabs, while all other circles will offer three licences. Winning bidders will be required to deposit the full bid amount with ten days of the auctions completion, and will be permitted to offer commercial 3G services from 1 September 2010.

By the end of the second day of the auction one provisional winning bid for a pan-India 3G concession had reached approximately INR40.85 billion, according to the Economic Times, with ten rounds of bidding having been completed.