Growth in broadband penetration to herald next phase of growth in telecom: CARE Ratings

With the culmination of the BWA auctions on 11 June, the Government has finally wrapped up what is considered to be one of the biggest auctions of its kind in the world over the past few years.

The government has raised revenues of around Rs38,543 crore from the three BWA spectrum slots alone. With this, the total revenues generated by the government from the auction of both 3G and BWA spectrum touched Rs1.06 lakh crore, which is more than three times the initial estimate of Rs35,000 crore.

The pan India BWA spectrum price stood at Rs12,847.77 crore with Mumbai and Delhi emerging as the highest priced circles at Rs2,241.02 crore and Rs2,292.95 crore respectively.

Unlike the 3G auctions where there were no pan India winners, in the BWA auctions, Infotel Broadband Services Private Ltd in which Reliance Industries Ltd has announced acquiring a 95-per cent stake (See: RIL acquires 95-% stake in Infotel Broadband), has emerged as the winner in all 22 circles. 

This is the Mukesh Ambani owned Reliance Industries's first foray of the into the telecom sector after 2005. As part of the deal, RIL is expected to pay the BWA spectrum fee for Infotel, which amounts to Rs12,847.77 crore and infuse funds for the roll out.

"The BWA spectrum was bid aggressively by players like Infotel and Qualcomm as it entails allocation of 20 Mhz of spectrum, which will enable them to provide broadband services to the consumers using either the Worldwide Interoperability for Microwave Access (WiMax) technology platform or the Time Division-Long Term Evolution (TD-LTE) technology platform," says Gaurav Dixit, analyst from CARE Ratings.