Spectrum auction for 4th day takes off from about Rs 50,000 crore

The spectrum auction started today with excess demand registered in Delhi service area for premium 900 Mhz band and in Assam and Bihar service circle for 2G spectrum

"Auction has started. It is continuing because there has been more demand for spectrum in some circles compared to total block of spectrum available," a DoT (Department of Telecom) official said.

The auction on February 5, the third day, ended with bids of around Rs 50,000 crore for airwaves, ensuring that government gets at least about Rs 14,650 crore upfront from the auction.

Bids worth about Rs 29,000 crore were received for 2G airwaves in 1800 Mhz band which has been put for auction following a Supreme Court order of February 2013.

The premium 900 Mhz band attracted bids of over Rs 20,500 crore at the end of the auction rounds on Wednesday. Demand for 1800 Mhz spectrum increased in 10 circles with competition intensifying in Assam, Delhi and West Bengal Service area on the third day.

In premium 900 Mhz band, rigorous bidding was seen in Delhi service area, where price increased by about 60 per cent to Rs 574.08 crore per block compared to base price fixed by government.

The 900 Mhz spectrum price in Mumbai service area soared about 72 per cent to Rs 563.09 crore per block from the base price. Price of airwaves in this band increased by about 54 per cent in Kolkata to Rs 192.71 crore.

The government's two previous auctions did not elicit good response as the floor price discouraged bidders. Out of five online spectrum auctions, the present auction is largest in terms of quantum of airwaves put for sale and third longest till date in terms of duration.

3G auction in 2010 lasted for 34 days, broadband wireless airwaves ended in 16 days while 2G auction in November ended in two days. CDMA auction in March concluded the same day.

The spectrum in 900 Mhz band put for auction is currently held by Vodafone, Airtel and Loop. While Loop Mobile is not participating in auction, it is a must win situation for Vodafone and Airtel in auction to retain their airwaves. New entrant Mukesh Ambani-led Reliance Jio Infocomm is also competing for these airwaves.

Mobile signal transmitted in 900 Mhz band gives almost double coverage than those transmitted in the 1800 Mhz band.

The budget for 2013-14 set a total target of Rs 40,874 crore from spectrum revenue in this fiscal and a bumper collection through airwaves auction would help government keep fiscal deficit under control.

The country's fiscal deficit at Rs 5.16 lakh crore has already crossed 95 per cent of budget target in the first nine months of 2013-14.