Damp squib auction brings in less than a quarter of target funds

15 Nov 2012

The Department of Telecommunications (DoT) has published the preliminary results of its auction of 2G frequencies. The sale fell far short of the government’s expectations with no cellco bidding for pan-India spectrum and spectrum in the four most expensive circles – Delhi, Mumbai, Karnataka and Rajasthan – left unsold. The government’s controversially high reserve prices were cited by operators and commentators as the reason for the poor turnout: pan-India spectrum had a total base price of INR138.5 billion (USD2.52 billion). Whilst the government set a target income of INR400 billion from the sale, it fell far short of the mark, bringing in only INR94.1 billion. Five cellcos took part in the tender, three of which had had their previous concessions revoked by the government, and two incumbents. Telewings Communications Services – the new wireless arm of Norway’s Telenor which replaces Uninor – won spectrum in six circles, Idea in eight and Videocon six, whilst Bharti gained additional spectrum in one area and Vodafone in 14.

Telewings was awarded 5MHz (four blocks of 1.25MHz) of spectrum in each of the Andhra Pradesh, Bihar, Gujarat, Maharashtra, Uttar Pradesh (East) and Uttar Pradesh (West) circles. Idea Cellular acquired 5MHz of spectrum in Assam, and the same amount in Jammu & Kashmir, North East, Orissa, Kolkata and Tamil Nadu. In West Bengal, the cellco was awarded a total of 6.25MHz of spectrum, though Idea had less success in the hotly contested Bihar circle winning just 1.25MHz. Meanwhile Videocon secured 5MHz in Bihar, Gujarat, Haryana, Madhya Pradesh, Uttar Pradesh (East) and Uttar Pradesh West. Bharti successfully bid for a single 1.25MHz block of spectrum in Assam whilst Vodafone won additional spectrum in Assam (2.5MHz), Bihar (2.5MHz), Haryana (2.5MHz), Himachal Pradesh (1.25MHz), Jammu & Kashmir (2.5MHz), Kerala (1.25MHz), Madhya Pradesh (2.5MHz), Maharashtra (1.25MHz), North East (2.5MHz), Orissa (2.5MHz), Punjab (1.25MHz), Uttar Pradesh (East, 1.25MHz), Uttar Pradesh (West, 2.5MHz) and West Bengal (2.5MHz).