Higher than expected spectrum bids on Day-1

NEW DELHI: Day one of India’s first spectrum auction in five years saw substantially higher competition than expected, with the government receiving bids worth Rs 77,146 crore. Analysts had expected the auctions to fetch only around Rs 45,000-50,000 crore.

However, while all three major telcos - Reliance Jio, Bharti Airtel, and Vodafone Idea - participated in the bidding, the premium 700 MHz and 2500 MHz bands remained entirely without suitors. The 700 MHz band had remained untouched during the last auctions also held in 2016, with the industry finding the pricing rather expensive.

The government consequently brought the reserve price down to Rs 6,568 crore per MHz for this round from Rs 11,485 crore in 2016, but industry sources say telcos consider the new prices inflated, too. And since one-third of the 2308.80 megahertz of airwaves being auctioned this round are in the 700 MHz band, the higher-than-expected bids received for the other bands still only account for a fraction of the Rs 3.92 lakh crore worth assets on offer. 

"There have been bids for 849.20 MHz so far. Excluding spectrum in 700 MHz and 2500 MHz bands, this is almost 60% of the spectrum put to auction," Telecom ministry said, adding that the bidding will continue on Tuesday.