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Spectrum auction: Bids worth Rs 65,789 crore in five days, 60% airwaves unsold


It was touted as the biggest auction of telecom spectrum surpassing all previous auctions. But after the dust settled, it turned out to be a damp squib with more than half the airwaves which included premium 4G bands left unsold. The auction once again re-enforced the adage “Don’t count your chickens before they hatch. The auction left the telecom authorities red-faced and returned to their calculations to find out what went wrong.

Government got it all wrong

In five days, the auction could collect only Rs 65,789 crore of bids against an expectation of Rs 5.6 lakh crore. The top notch 700 MHz and 900 MHz spectrum could not find any users, and it must be partly blamed on the high reserve or auction start price set by the government. The lukewarm response in the 700 MHZ band can be blamed squarely on the Government who had not done their homework properly while fixing the prices.

Growth Sluggish, high debts

The high debt burden and the single digit growth of the industry have made it impossible for service providers to invest in risky ventures. The government will surely have to revisit and take notice that high reserve price did not augur well for bidding as far as the 700 MHz is concerned. The prices will have to be recalibrated to be put once again on auction.

The government has been able to sell-

  • 20% of airwaves in the 800MHz,
  • 79% of airwaves in the 1800MHz
  • 24 % of airwaves in the 2100MHz
  • 62 % of airwaves in 2500MHz

The multinational UK-based Vodafone India unit was the most active service provider in the auction and took Rs 20,000 crore worth of spectrum followed by Bharti Airtel which received Rs 14,244 crore worth of frequencies, while Idea Cellular put in Rs 12,798 crore of bids.

Reliance Jio has doled out Rs 13,672 crore on spectrum buying. Telecom Minister Manoj Sinha put up a brave face and said that he is not disappointed since the government will get the highest upfront payment received in the last five years.


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