Spectrum Auction 2016: Telcos Deposit Rs. 14,653 Crores as Earnest Money

Spectrum Auction 2016: Telcos Deposit Rs. 14,653 Crores as Earnest Money

Leading telecom operators have deposited Rs. 14,653 crores as earnest money for the country’s largest ever spectrum auction , with Reliance Jio alone submitting Rs. 6,500 crores.

As per the information released by the Department of Telecom Monday, with Rs. 6,500 crores, the Mukesh Ambani-led firm is eligible for placing bids in any of the 22 telecom circles in the country and in any spectrum band.

Vodafone India has submitted EMD of Rs. 2,740 crores, Idea Cellular Rs. 2,000 crores and Bharti Airtel Rs. 1,980 crores. These companies too are eligible for bidding in any circle. Earnest Money Deposit (EMD) is indicative of a company’s strategy to bid in specific circles and spectrum bands. It gives them eligibility points with regard to those circles.

Reliance Jio, as per the information, is only company which has potential to buy spectrum in premium 700MHz at floor price in most of the circles as a pan-India bidder for 700MHz spectrum needs to have EMD of Rs. 5,610 crores.

This is the first time that government will auction the 700MHz band, considered to be the most premium as the estimated cost of providing service through it is about one-third of 3G under the 2100MHz band.

A firm opting to buy spectrum in 700MHz band will need to shell out a minimum of Rs. 57,425 crores. Total spectrum worth Rs. 4,01,975 crores in 700MHz band is being put up for auction.

Tata Teleservices has submitted EMD of Rs. 1,000 crores, Reliance Communications Rs. 313 crores and Aircel Rs. 120 crores.

Mobile frequencies in all bands – 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz and 2300MHz – will be put on the block in the upcoming auction. All the radiowaves being put up for auction can be used for providing high-speed 4G services.

The Finance Ministry in the Budget pegged the revenue target at Rs. 98,995 crores from the telecom space, which includes Rs. 64,000 crores from the auction of about 2,354.55MHz of spectrum and the rest from various levies and services this financial year.

As per DoT, Tata Teleservices can bid for spectrum in all bands in Mumbai and Maharashtra circles, and 800MHz band (known as CDMA service band) across all circles except Assam and North East (NE), and 900MHz in all circles barring Assam, NE and Delhi. It can bid for 3G spectrum in Gujarat, Haryana, Karnataka, Kerala, MP, Maharashtra, Mumbai, Punjab, Rajasthan and UP (West). It is not eligible to bid for premium 700MHz band spectrum except in Mumbai and Maharashtra.

Similarly, there are host of restriction on bidding eligibility of Aircel. It cannot bid for spectrum in premium 700MHz, 800MHz and 2500MHz in any of the circle. The company has been found to be ineligible for bidding in 13 out of 22 circles for 3G spectrum which include Tamil Nadu, Uttar Pradesh (East), Andhra Pradesh, Bihar, Karnataka etc.

It can only bid for spectrum in 900 and 1800MHz band across all circles.

Anil Ambani-led Reliance Communications is eligible to bid for spectrum across country except North East and Assam.

 

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