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2G spectrum costs continue to rise as sale passes seventh day

11 Feb 2014

Bid prices for spectrum have increased beyond government expectations after the seventh day of the Indian 2G auction, with the state set to net more than INR583 billion (USD9.375 billion) as a result of the sale, the Economic Times writes. Most notably, 900MHz frequencies in the Delhi circle had more than doubled their reserve value of INR3.60 billion to INR7.41 billion, although bids for this band were generally muted. Bidding was still active for 1800MHz spectrum in six circles, sending the auction to an eighth day. However, investors have been less than optimistic about the auction, put off by concerns of the high levels of debt burden the spectrum will incur, and stock prices for Idea Cellular, Bharti Airtel and Reliance Communications (RCOM) have suffered as a result. According to the paper, the cellcos with deepest pockets, such as Airtel, Vodafone and Reliance Jio Infocomm are driving up prices in a bid to force smaller operators to drop out of the running completely.

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