It took a total 34 days for the Indian Government to raise $15 billion from the 3G spectrum auction. The amount is too high as compared to what the Indian government initially expected.
The government raised approx twice the amount i.e 677.1 billion rupees ($14.7 billion) from the 2100MHz auction alone when compared with the 350 billion rupees it forecast from both the country’s 3G and Broadband Wireless Access spectrum auctions (the latter is due begin on Friday).
Bharti Airtel emerged as the biggest contributor to the 3G spectrum auction as it picked spectrum in 13 circles including Mumbai and Delhi with a whooping amount of 122.95 billion rupees. Vodafone was next, winning spectrum in nine circles for 116.18 billion rupees, followed by Reliance Communications which successfully bid 85.85 billion rupees for 13 regions.
Aircel will pay about 65 billion rupees for spectrum in 13 second-and third-tier circles, while Idea Cellular won spectrum in 11 service areas for 57.69 billion.
As per the initial plan, all the operators wanted to get a acquire spectrum in all 22 telecom circles, however, aggressive bidding pushed the price tag for pan-Indian spectrum to $3.6 billion and hence out of reach of the operators. The operators had to cut down to half of the circles as compared to their original targets. Analysts had forecast a pan-Indian footprint would cost in the region of $1.3 billion.
“The auction format and severe spectrum shortage along with ensuing policy uncertainty drove the prices beyond reasonable levels,” said Bharti.“As a result, we could not achieve our objective of a pan-India 3G footprint in this round.”“The fact that most of the companies have not gone and done blanket bidding [for all circles]…clearly shows that each operator has invested in circles where they…have a strong presence,” Manesh Patel, partner with Ernst & Young told Business Standard.“This will enable the companies to monetise the spectrum in the long run.”One analyst told telecomasia.net it could take 8-10 years for operators to recover their 3G investment.
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