RIL's 900 MHz hopes dashed; govt to collect Rs61,162.22 cr from auction

The auction of second generation radio spectrum in the 1800 MHz and 900 MHz bands that began on 3 February 2014 ended on Thursday fetching the government Rs61,162.22 crore after 68 rounds of bidding.

The department of telecommunications (DoT) announced the provisional results of the auction, which are subject to approval by the government.

Bids have been received in all 22 service areas in the 1800 MHz band and in all 3 service areas in 900 MHz band, helping the government to far exceed its own target.

The bid value of the spectrum in the two bands, used for offering 2G services, has reached around 90 per cent of the Rs67,718.95 crore that the government had received in the 3G spectrum auction in 2010.

Vodafone Group and Bharti Airtel won critical 900 MHZ wireless telecom spectrum in metros like Delhi and Mumbai while Mukesh Ambani's Reliance Jio Infocomm, which bid aggressively for both the bands - the premium 900 Mega Hertz and not so efficient 1,800 MHz - choose spectrum only in the 1800 MHz band, that too  in 14 out of 22 circles.

Reliance Jio Infocomm owns pan-India 4G spectrum and is the only operator to own pan India spectrum in the category.

For Vodafone, whose licence in Delhi, Mumbai and Kolkata is due to expire in November this year, winning spectrum in these circles  was necessary to continue operations and put in bids worth Rs19,600 crore to win 900 MHz airwave in the three metros and 2G 1800 MHz spectrum in 11 circles.

Sunil Bharti Mittal-promoted Airtel, whose licences in Delhi and Kolkatta is due to expire in November, won 900 MHz spectrum in both these metros as also in Mumbai. Airtel also won 1,800 MHz spectrum in 15 circles. It put in total bid worth Rs18,530 crore for a total of 115 MHz of spectrum in 900 MHz and 1800 MHz bands.

Idea was the only other company to win the 900 MHz spectrum in Delhi.

The government will initially collect Rs18,296.36 crore of the Rs61,162 crore total bid amount, against the earlier expectations of Rs11,300 crore of revenues flowing in from the spectrum auction in the current financial year.

Uninor won 1800 MHz band spectrum in five circles while Idea won it in 11 circles.

Anil Ambani's Reliance Communications won just one circle of 1800 MHz in Mumbai, while Tata Communications drew blank while Aircel won spectrum in 5 circles.

''I am very happy to report that auction is over. The total revenue that will come to government is Rs61,162.22 crore. To that extent particular auction has been extremely successful,'' telecom minister Kapil Sibal said.

While the government got a windfall, consumers are unlikely to benefit from the spectrum licensing as it benefited some while some will have to exit.

There may not be any immediate rise in tariffs, but the consolidation could result in a reduction in competition, making it easy for telcos to  raise tariff.

The government said 80 per cent of the airwaves on auction in the 1800 MHz band was sold out while the entire in 900 MHz band spectrum on offer was sold out.

The total spectrum on offer was 46 MHz in 900MHz band (Delhi, Mumbai and Kolkata) and 385 MHz in 1800 MHz band (all 22 circles).