India’s 2G and 3G auctions, which kicked off 4 March, have already received bids of more than INR940 billion ($15 billion) from eight operators, with bids in some regions nearly three times higher than the reserve price.
The government had expected the auctions to generate at least INR820 billion in revenue. It said yesterday that demand in the 900 and 800MHz bands was fierce, but spectrum in the 2.1GHz band in some regions has not yet been sold, the Economic Times said.
The bidding companies are Aircel, Bharti Airtel, Idea Cellular, Reliance Jio Infotel, Reliance Communications (RCom), Tata Teleservices, Uninor and Vodafone.
The long-awaited auctions had been pushed back a week to give the government more time to prepare and are the fourth round since the Supreme Court cancelled 122 mobile licences in 2012.
The auctions are important for Vodafone, Idea and RCom because their licences for the cost-efficient 900MHz spectrum expire in certain regions over the next year.
Prices in five of nine areas where Idea’s licences will expire have increased 75 per cent above the base price, The Times said. RCom is trying to defend its spectrum holding in seven regions where it doesn’t have any fallback spectrum.
The winning price on Monday in Bihar for the 900MHz band was almost three times the reserve price, the Times said.
Mobile operators had made a number of requests to the Department of Telecom to review the reserve prices, particularly for the 900MHz band, complaining that the price is too high and could lead to higher mobile rates, slowing the government’s Digital India initiative.
The Cellular Operators Association of India (COAI) had said releasing only 5MHz would lead to “artificial scarcity” and raise bids during the auction and likely lead to higher mobile rates.
The association noted that the country’s operators already have a combined debt of some INR2.5 trillion.