Government gets Rs.61,162 crore from 2G spectrum auction

New Delhi  : The government mopped up Rs.61,162.22 crore in the second generation (2G) spectrum auction in 900 MHz and 1,800 MHz airwaves that ended Thursday after 68 rounds, Communications Minister Kapil Sibal said here.

“I want to see a smile on the face of the finance minister and also of the consumers and that can be only seen if the service provided by the operators is efficient and is at reasonable prices,” he said.

Now that the auction is complete, the real work for the industry will begin, he noted.

Telecom Secretary M.F. Farooqui said the government has garnered Rs.37,572.62 crore in 1,800 MHz and Rs.23,589.62 crore in 900 MHz.

“The auction has progressed smoothly. I think market has determined price through keen competitive bidding,” he told reporters.

Eight mobile phone service providers – Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone, Telewings, Aircel, Tata Teleservices and Idea Cellular – took part in the auction that began Feb 3 for 46 MHz in 900 MHz band and 385 MHz in 1,800 MHz band.

Bharti Airtel, whose licenses in Delhi and Kolkata are due to expire in November, won back 900 MHz in both these metro circles and also added the same in Mumbai. It also won 1,800 MHz spectrum in 15 circles.

The company in a statement said it has acquired 115.0 MHz spectrum for a total consideration of Rs.18,530 crore in the just-concluded spectrum auction.

“Bharti Airtel will make an upfront payment of Rs.5,425 crore, with the balance to be paid in ten annual installments of Rs.1,310 crore each, commencing two years from now,” the statement said.

It added that the company plans to roll-out high speed 4G networks in various circles using FD-LTE technology in the 1,800 MHz band besides its existing TD-LTE roll-out in the 2,300 MHz band, giving it a pan-India 4G footprint.

Vodafone, whose licences in Delhi, Mumbai and Kolkata are due to expire in November this year, retained existing 900 MHz spectrum in Mumbai, Delhi and Kolkata, the company said.

It had put in bids worth Rs 19,600 crore to win 900 MHz airwaves in the three metros and 1800 MHz spectrum in 11 circle. The company needs to pay Rs.5,600 crores to the government in this financial year.

Idea was the only other company to win the 900 MHz spectrum in Delhi.

Uninor won spectrum in five circles – UP East, UP West, Bihar and Jharkhand and Andhra Pradesh – in 1800 MHz band.

Idea Cellular also received got 11 circles in 1800 MHz airwaves.

Reliance Communications won 1800 MHz in Mumbai circle.

Mukesh Ambani’s Reliance Jio Infocomm won some circles in 1,800 MHz.

Aircel won a few circles in 1,800 MHz.

Farooqui said 80 percent of the airwaves that was on auction in 1800 MHz was sold out and in 900 MHz entire airwaves that was offered got sold out.

“The government will get minimum of Rs.18,296.36 crore from this auction this fiscal,” he said. The government had set a target of Rs.11,343 crore from the auction.

The total spectrum on offer is 46 MHz in 900 MHz band (only Delhi, Mumbai and Kolkata) and 385 MHz in 1,800 MHz band (all 22 circles) simultaneously. The government has targeted to mop up Rs.40,874.50 crore from the spectrum auction in 2013-14.

The telecom players who participated and won airwaves have the option to pay 33 percent upfront for 1800 Mhz band, and 25 percent in case of 900 Mhz band.

Sibal said that the sector has “enormous potential”. “These licences are for a period of 20 years. These bandwidth will be given to operators till 2034.”

“In a 20-year scenario, this sector will again be the golden goose that laid the golden egg. This sector has enormous potential. We have not yet started looking at the 3G revolution and the data revolution that is going to come up. They are going to be very, very innovative unique base,” he added.