Govt green lights ‘largest ever’ spectrum auction

6 Jan 2015

India’s cabinet has approved plans for the country’s largest ever spectrum auction to take place next month, with a total of 465.75MHz of 2G and 3G frequencies due to go under the hammer, the Economic Times writes. The government is hoping to raise at least INR800 billion (USD12.59 billion) from the sale, the reserve price for the 2G frequencies alone totalling INR648.4 billion whilst the Telecom Commission and cabinet have yet to confirm the proposed base price for 3G spectrum of INR27.2 billion per MHz of pan-India spectrum. The auction will feature 99.2MHz of 1800MHz frequencies across 15 operating areas, 177.8MHz of 900MHz spectrum across 17 circles, 103.75MHz of 800MHz (CDMA) frequencies in all 22 circles and 85MHz of 3G spectrum in the 2100MHz range across 17 circles. Reserve prices of spectrum were set as follows: 800MHz, INR36.46 billion per MHz of pan-India spectrum; 900MHz, INR39.8 billion per MHz of pan-India spectrum excluding Delhi, Kolkata, Mumbai and Jammu & Kashmir; 1800MHz, INR21.91 billion per MHz of pan-India (excluding West Bengal and Maharashtra) spectrum. The reserve price for 3G spectrum is expected to be ratified on 15 January ahead of the auction next month.

The competition is expected to be fiercely contested, with Reliance Communications (RCOM), Vodafone India, Bharti Airtel and Idea Cellular facing ‘must-win’ situations in order to continue operating in areas where their 900MHz concessions are up for renewal. Of the cellcos mentioned above, Idea has licences in nine circles up for renewal with no other spectrum holdings to fall back on in four of those areas, whilst RCOM and Vodafone must renew in seven circles apiece (four each with no other spectrum) and Airtel has expiring licences in six areas, two of which are must-win. Further, the additional 3G frequencies are expected to see a great deal of interest as none of the nation’s 3G providers currently have pan-India concessions: Airtel, Aircel and RCOM currently have the largest footprints with 3G licences for 13 circles each.