60% spectrum unsold as auction ends with Rs65,789-cr bids

India's biggest auction of telecom spectrum ended today with just Rs65,789 crore of bids coming in over five days, leaving 60 per cent of the airwaves on offer, including the premium 700MHz and 900 MHz bands unsold.

As the spectrum sale completed over five days, bids were received for 964.80 MHz of spectrum against 2,354.55 MHz across seven bands put on offer, telecom minister Manoj Sinha said.

 The auction, which commenced on October 1, was spread over 31 rounds across five consecutive days.

The telecom department had fixed a base price of Rs5,60,000 crore for the airwaves, including the premium 4G bands.

UK-based Vodafone's India unit was the most aggressive bidder, placing bids for Rs20,000 crore worth of spectrum. Bharti Airtel, the nation's biggest telecom company, bought Rs 14,244 crore worth of spectrum, followed by new comer Reliance Jio, which placed bids worth Rs13,672 cr, while Idea Cellular put in Rs12,798 crore of bids.

"The total upfront payment to the government is about Rs 32,000 crore which is the highest in the last five years. Wherever operators wanted to improve their data services, they participated. Total, we could sell 964.80 MHz of spectrum," Sinha told reporters

Despite the tepid response to the spectrum auction, the government is expected to get the highest upfront payment received in the last five years.

While Airtel acquired 173.8 MHz spectrum across 1800/2100/2300 MHz bands, Idea Cellular bought 2100 MHz band spectrum in Mumbai circle.

Reliance Jio said it has acquired 269.2 MHz spectrum across all 22 circles, but did not disclose the amount the company put in the auction and only said "the government process is not yet complete."

Jio was widely expected to bid for the premium 700 MHz and 900 MHz spectrum, but the company too did not take much interest in acquiring the high-price spectrum.

"We have expanded our spectrum footprint thereby significantly enhancing capacity of our all-IP data strong network and ensuring world class services for all Indians. Jio is committed to taking India to global digital leadership by bringing the power of data to all Indians," Reliance Industries chairman Mukesh Ambani said.

Idea said it has procured 349.2 MHz of spectrum for Rs12,798 crore securing additional airwaves in 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands.

Reports said, Tata Teleservices shelled out Rs4,500 crore for securing spectrum. It has also managed to retain spectrum in Mumbai, where its licence is set to expire next September.

Spectrum in 1800 MHz can be used for 2G/4G services, while 2100 MHz band supports 3G/4G services. The 2500 MHz is a 4G band, 2300 MHz (4G) and 800 MHz (2G/4G).

With 4G services on the roll-out telecom operators were widely expected to bid the maximum to secure premium airwaves so as to remain competitive in the world's third-largest and an emerging telecom market.

"The issue of quality of service, spectrum scarcity in India is history with this auction. Government has not done any profiteering, this auction was about putting spectrum in the hands of the industry. The appetite of the industry has been satiated," Telecom Secretary JS Deepak said.

The government sold the entire available spectrum in the 2300MHz band, while 700MHz and 900MHz remained untouched.

Industry body COAI said lack of enthusiasm for 700MHz band was majorly due to its "unrealistic pricing", high debt and single-digit growth that the industry is currently reeling under.

"We are hopeful the Government and the DoT will take cognizance of the role a high reserve price had on bidding, as far as the 700 MHz is concerned, and will recalibrate the price so that spectrum in the band could be put up for auction, maybe two years from now," COAI Director General Rajan S Mathews said.

The government sold about 20 percent of the airwaves in 800MHz, 79 per cent in 1800MHz, 24 per cent in 2100MHz and 62 per cent in 2500MHz band.

Companies winning spectrum in frequency bands above 1GHz  (1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz) will have to make 50 per cent upfront payment and the remaining can be paid in 10 years after a two-year moratorium.

This means that the government would get about Rs32,000 crore in upfront payment, against the target of getting Rs64,000 crore from auction for this fiscal.