Rs 1.09 lakh crore in govt coffers

Mangalore Today News Network

New Delhi, March 26, 2015, DHNS: The country’s biggest telecom spectrum auction ended on Wednesday with the government garnering Rs 1.09 lakh crore amidst fears that mobile tariff could go up due to the high price paid for radio waves by telecom firms.

After 115 rounds of aggressive bidding spreading over 19 days, the government to garner Rs 1,09,874 crore from operators, which is highest from the previous held auction in 2010 where the government earned Rs 1.06 lakh crore, Telecom Minister Ravi Shankar Prasad said.

The names of the winners will be announced only after the Supreme Court gives its nod due to pending petitions. The court will hear the case on March 26. Sale of airwaves in four bands got bids worth Rs 1,09,874 crore even as 11 per cent spectrum went unsold. At the base price, the value of spectrum in the auction was worth about Rs 82,395 crore. However, the fierce bidding is likely to lead to rise in mobile call, SMS and data charges as operators may pass on the cost of spectrum to consumers.

“With the costly spectrum financial and cost structure of industry has been completely altered. Consequently tariff will have to be increased to meet commitment to government,” industry body COAI (Cellular Operators Association of India) Director General Rajan S Mathews said. 

Former Secretary General of industry body AUSPI, (Association of Unified Telecom Service Providers of India)  S C Khanna, said, “All big companies are debt-ridden. If price of spectrum has gone up, which is the raw material for operators, the only choice they have is to marginally hike tariffs.”

A total of 380.75 MHz of spectrum was put on sale in the premium 900 MHz band, 1,800 MHz and 800 MHz, while 5 MHz was up for bidding in the 2,100 MHz band, used for 3G mobile services, across 17 out of 22 telecom.

Depending on the band, carriers will have to pay as much as 33 per cent of their final bid within 10 days of the auction’s conclusion and the rest in 10 annual installments starting in 2017. The permits will be valid for 20 years.

Total eight firms have participated in the bidding. While Idea, Airtel, Vodafone and Reliance Communications participated in the auction mainly to defend their existing spectrum holding, Reliance Jio, Tata Teleservices, Telewings (Uninor) and Aircel took part to buy additional spectrum.