3G Auction...Pan-India price nearly doubles

Bidding process for the 3G airwaves continued into the 11th day on Thursday. Bids for the third-generation (3G) wireless spectrum nearly doubled from the base price fixed by the Department of Telecommunications (DoT). A provisional winning bid for pan-India 3G spectrum licence rose to Rs69.68bn on Thursday, the DoT said on its web site. The DoT has fixed a base price of Rs35bn for a pan-India 3G licence. As per the details given by the DoT, six more Clock Rounds were completed on Thursday. With this, the total number of Clock Rounds completed to date has come to 64.

Delhi continues to be the most lucrative of the 22 service areas, attracting top bid of Rs8.5bn. Mumbai is at the second spot with a bid of Rs7.5bn and Tamil Nadu is in the third spot with a bid of Rs7.1bn followed by Maharashtra at Rs6.97bn and Karnataka at Rs6.38bn. The bid for Andhra Pradesh stood at Rs6.26bn while that for Gujarat was at Rs5.83bn. In almost 50% of the country, spread across 16 states, the demand for 3G airwaves has been negative. Jammu & Kashmir, all seven North East states, Orissa and Himachal Pradesh have witnessed negative bids. The 3G bid prices have not seen any material rise in these places after 11 days of bidding. Other regions that are witnessing negative bids, include Haryana, UP (West), MP, Punjab , Kerala and West Bengal.

The 3G auction was kicked off on April 9. The 3G auction resumed on April 15, as April 14 was a public holiday. The Government is auctioning three slots of 3G airwaves in 17 telecom service areas. Only two slots are up for sale across the country for broadband wireless access (BWA) airwaves, which would start two days after the closing of 3G auction. Six existing major telecom service providers - Bharti Airtel, Vodafone Essar, Reliance Communications, Idea Cellular, Tata Teleservices and Aircel - are vying with each other for spectrum in all the 22 telecom circles.

The Telecom Ministry raised its estimates of windfall from the 3G and BWA auction. The Government now expects its 3G and BWA auctions to raise Rs500bn (US$11.2bn), much higher than the Government's budget estimates of Rs350bn, Union Telecom Minister A. Raja said on April 23. Earlier in the week, Raja had said he expected the auctions to raise Rs450bn. "Everyday it is going up," he told reporters outside the parliament, referring to the bids for 3G spectrum, for which the auction is currently underway. Telecom PSUs BSNL and MTNL have already been allotted 3G spectrum. The two have also launched their 3G mobile services. However, they would have to match the highest bids.