3G auction ends...Govt set to pocket a cool Rs677.19bn

India's auction of third-generation (3G) mobile airwaves finally ended on May 19, and the Government's bounty from the same swelled to a whopping Rs677.19bn as against projection of Rs350bn from the combined 3G-BWA auction. This includes the amount payable by MTNL and BSNL. Meanwhile, bids for one set of pan-India 3G mobile licences reached Rs168.28bn on the 34th day of the auction compared to the base price of Rs35bn. Price per block of 2x5 MHz Pan India spectrum is Rs167.51bn. The 3G auction started on April 9. BWA bidding is to start two days after the close of the 3G auction. The BWA auction is also expected to be equally competitive, as 11 players are in the fray for just two slots for each circle, while the reserve price for pan-India licence is Rs17.5bn.

Out of a total of 22 circles for the 3G spectrum, 17 have three slots, while in rest of the five circles, four blocks of spectrum are available. The successful bidders would be allotted air waves in September after the spectrum is vacated by the defence forces. Proceeds from the two auctions would help the Government bridge the fiscal deficit. India's fiscal deficit may come down to 5.2% of GDP from the estimated 5.5% of GDP. The Government has pegged the fiscal deficit at Rs3.81 lakh crores for FY11.

Nine companies - Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, STel and Videocon Telecommunications - took part in the online auction. Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL), who have already been issued 3G airwaves, will also have to pay the winner’s price. The winning firms will have to deposit the money within 10 days from now. As per the details given by the Department of Telecommunications (DoT), three more Clock Rounds were completed on May 19. With this, the total number of Clock Rounds completed to date has come to 183. The auction results are provisional and subject to approval by the Government, the DoT said.