Telcos deposit Rs14,653 crore for spectrum bidding
19 Sep 2016
Major telecom operators have deposited a combined Rs14,653 crore, including Rs6,500 crore by Reliance Jio, as earnest money for the country's largest ever spectrum auction that will begin on 1 October.
The Rs6,500-cr deposit makes the Mukesh Ambani-ed reliance Jio eligible to bid in any spectrum band across 22 telecom circles, as per the information released by the Department of Telecom.
Telecom companies had on Saturday sought deferment of the mega spectrum auction scheduled for 29 September by a day or two so as to provide more gap between the trial session and the actual start of bidding.
Besides Reliance Jios' Rs6,500-crore deposit, Vodafone India has submitted EMD of Rs2,740 crore, Idea Cellular Rs2,000 crore and Bharti Airtel Rs1,980 crore. All these companies are eligible for bidding in any circle.
Tata Teleservices has submitted EMD of Rs1,000 crore, Reliance Communications Rs313 crore and Aircel Rs120 crore.
Mobile frequencies in all bands - 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz - will be put on the block in the upcoming auction. All the radiowaves being put up for auction can be used for providing high-speed 4G services.
Earnest Money Deposit (EMD) is indicative of a company's pricing strategy in the bidding process in specific circles and spectrum bands.
However, for acquiring spectrum in the premium 700 MHz band at floor price in most of the circles as a pan-India bidder needs to have EMD of Rs5,610 crore and this makes Reliance Jio the only company which has potential to buy that spectrum.
The 700 MHz band is considered to be premium band as the estimated cost of providing service through it is about one-third of 3G under the 2100 MHz band.
A firm opting to buy spectrum in 700 MHz band will need to shell out a minimum of Rs57,425 crore. Total spectrum worth Rs4,01,975 crore in 700 MHz band is being put up for auction.
The Finance Ministry in the Budget pegged the revenue target at Rs 98,995 crore from the telecom space, which includes Rs 64,000 crore from the auction of about 2,354.55 MHz of spectrum and the rest from various levies and services this financial year.
As per DoT, Tata Teleservices can bid for spectrum in all bands in Mumbai and Maharashtra circles, and 800 MHz band (known as CDMA service band) across all circles except Assam and North East, and 900 MHz in all circles barring Assam, NE and Delhi. It can bid for 3G spectrum in Gujarat, Haryana, Karnataka, Kerala, MP, Maharashtra, Mumbai, Punjab, Rajasthan and UP (West). It is not eligible to bid for premium 700 MHz band spectrum except in Mumbai and Maharashtra.
Similarly, there are host of restriction on bidding eligibility of Aircel. It cannot bid for spectrum in premium 700 MHz, 800 MHz and 2500 MHz in any of the circles. The company has been found to be ineligible for bidding in 13 out of 22 circles for 3G spectrum which include Tamil Nadu, Uttar Pradesh (East), Andhra Pradesh, Bihar, Karnataka etc.
It can only bid for spectrum in 900 and 1800 MHz band across all circles.
Anil Ambani-led Reliance Communications is eligible to bid for spectrum across country except North East and Assam.
