DoT Issues Final List Of Bidders For 1800 MHz GSM Spectrum Auction

India’s Department of Telecommunications (DoT) today issues final list of bidders for 1800 MHz GSM Spectrum Auction. There are only five players Airtel, Vodafone, Videocon, Idea Cellular and Telewings (Telenor -Uninor) left in the race for GSM spectrum.

There are no bidders left for 800 Mhz CDMA spectrum as Tata Teleservices (Tata Docomo CDMA) and Videocon Telecomminications withdrawing thier application as earlier we shared on TelecomTalk. Tata Teleservices had applied to participate in the auction for CDMA spectrum in three circles. Videocon, the only other applicant for CDMA spectrum in 10 circles, has already withdrawn from the auction.

Another CDMA operators Reliance Communications (Rcom) and Sistema Shyam (MTS India) have already stayed away from the auctions entirely.

With this new development in CDMA segment MTS India could gain from this. The exit of Videocon and Tata Teleservices could strengthen its argument that its licences should be restored since it had applied for CDMA spectrum for which there was no demand. Sistema Shyam Teleservices (SSTL – MTS India) ‘s licences were canceled by the Supreme Court along with those of other players given 122 licences in 2008 in its 2G verdict.

The 2G spectrum auction is to take place on November 12 and the final list of bidders to be announced on November 6. This will be followed by a mock auction on November 7 and 8 and thereafter the e-auction of 1,800 MHz band will take place on November 12.

Another interesting thing is that, now Only 5 bidders remain for GSM auction so incumbent operators like Bharti Airtel, Vodafone and Idea Cellular can easily mange or try that auction to get over at a low bid price because they have to pay a one time spectrum fee based on the final bid price in this auction, at the time of  renewal of their 20 years old Pan India 2G GSM spectrum.

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  • LOKESH November 10, 2012 6:12 pm

    Will Uninor continue their service in INDIA?

  • V.P.Guru November 8, 2012 2:11 pm

    Saurabh :
    @V.P Guru, Movement in stock price of teleco or any other company don’t depend only on one factor. So, you can’t say if operators reports addition of customers, its company’s stock price will appreciate just because of it. As an analyst or investor we have to analyze numerous things which include both fundamentals and technicals of a company. We all know that telecom as a whole is going through worst time in a decade and same can be confirmed by looking at stock prices of listed companies like Airtel, MTNL, Idea Cellular, Reliance Comm or Shyam Tele etc. The debt burden on the companies are always on the rise since 3G and BWA auctions and now things like one-time spectrum fee, license renewals in coming years will add to it. Falling ARPUs is again a concern. So investor can’t expect handsome returns in next few years until situation becomes stable.
    Sometimes I feel, whether telecom is a business or a charity in India? I mean Goverment asking for huge sums of money and also telling the operator not to hike tariffs beyond a certain limit is utter non-sense. Is this how business is done? When Govt is getting as per their wish then why they are trying to regulate the sector. It’s not the telecos but the Goverment which is looting common man and portraying companies as looters.
    2G spectrum scam occured because of corrupt ministers but in the end it’s the foreign investors who suffered. Supreme Court order becomes a nightmare for new operators and a money machine for Goverment.

    Yes, I agree with you in aspect of both valuation of share and future viability of industry. At the same time customer base decides the leader of telecom industry. It is also need to consider on valuation of share…

    My major doubt is why their is certain fall in customer base… the condition for disconnect a subscriber is prevails for long period and we’ve not come across this type of negative growth in the industry over the period. Kindly share me, If you know any details about it….

  • Saurabh November 8, 2012 10:39 am

    @V.P Guru, Movement in stock price of teleco or any other company don’t depend only on one factor. So, you can’t say if operators reports addition of customers, its company’s stock price will appreciate just because of it. As an analyst or investor we have to analyze numerous things which include both fundamentals and technicals of a company. We all know that telecom as a whole is going through worst time in a decade and same can be confirmed by looking at stock prices of listed companies like Airtel, MTNL, Idea Cellular, Reliance Comm or Shyam Tele etc. The debt burden on the companies are always on the rise since 3G and BWA auctions and now things like one-time spectrum fee, license renewals in coming years will add to it. Falling ARPUs is again a concern. So investor can’t expect handsome returns in next few years until situation becomes stable.

    Sometimes I feel, whether telecom is a business or a charity in India? I mean Goverment asking for huge sums of money and also telling the operator not to hike tariffs beyond a certain limit is utter non-sense. Is this how business is done? When Govt is getting as per their wish then why they are trying to regulate the sector. It’s not the telecos but the Goverment which is looting common man and portraying companies as looters.

    2G spectrum scam occured because of corrupt ministers but in the end it’s the foreign investors who suffered. Supreme Court order becomes a nightmare for new operators and a money machine for Goverment.

  • Balachandran k November 7, 2012 10:26 pm

    Will tata docomo continue their service in tamil nadu???

  • Ricky November 7, 2012 9:49 pm

    Saurabh :

    KM :

    Ricky :
    Can anyone please explain what is “Earnest money deposit”, “Initial Eligibility Points” and “Net Worth”. What is the meaning of this terms?

    +1

    Earnest Money- The money a buyer deposits to the seller showing buyers’s good faith in a transaction. For example- You want to buy a property which is worth Rs.1 crore and you deposit some money with the seller say Rs.5 Lakhs. This 5 percent amount is the Earnest Money Deposit with the seller which is showing buyer is intended to buy that property.
    Net Worth- Net worth of an individual or a company is the amount left by deducting liabilities from the fixed assets. For example- A person has fixed assets like Home, Car, Cash totalling Rs.1 crore and a liabilities or debt of Rs.45 Lakh which is to be repay. So Net Worth will be 100-45= 55 Lakhs. With time, value of different things either appreciate like Home or other property and depreciates like Car, Electronic items etc. So networth keeps fluctuating with time.
    Eligibility Point- Department of Telecom had set eligibility points according to different circles and earnest money deposit for each slot which is 1.25MHz. The eligibility points for bidding in different category i.e Metro, A, B, C circles are different and same has been allotted to different companies according to their earnest money deposit which makes them eligible to bid. For example- Eligibilty points set by DoT for every slot of 1.25MHz spectrum for Mumbai circle was 105 and Earnest Money Deposit required was Rs.86 crores per slot. So if any company has chosen Mumbai circle to bid for 5MHz spectrum i.e 4 slots of 1.25MHz, they’ve deposited Rs.344 crores as earnest money to DoT and have been allotted 420 Eligibility Points. For some A category circles, Eligibility points per slot is 50 and for B category it is 16 and 10 and for C category it is 10 and 3.
    For complete detail for every circle’s E.M and E.P download Notice Inviting Application or NIA from DoT website.
    Until now, as per our calculations by looking at EM and EP, only Uninor’s position is clear to some extent that they are bidding for 9 circles they are operating in, assuming minimum 4 slots of 1.25MHz i.e 5MHz of spectrum.

    Thanks a lot for such beautiful explanation.

  • V.P.Guru November 7, 2012 8:30 pm

    To avoid competition, they shown there is certain fall in customer base… Next month onward they may show there is rise in customer base to increase share value and get huge loan…

  • Abhishek Dutta November 7, 2012 2:37 pm

    It seems that, most of the telcos are less interested and There wont be any new foreign players, who wants to bid either…

  • Saurabh November 7, 2012 2:01 pm

    Telewings (or Uninor) EM deposit shows they have chosen 9 circles but EP shows that, there is 1 more B category circle. But in case they drop out Mumbai or any A category circle, they can use their eligibility points for other circles.

    As far as Videocon is concerned, they have deposited Rs.648 crores as EM and have and EP of 788 points which indicate 1 A category circle (EP-200), 8 B category circles (EP- 400) and 6 C category circles (EP-128) and one more circle as 60 EP gets left which may be Kolkata. If that’s the case they are 100 percent dropping Mumbai circle as their total EP is 788 and bidding for Mumbai means outgo of 420 points. Dropping Mumbai will allow them 6-7 B category circles or 2 A category circles.

    As I said, we are assuming 4 slots in these circles for 5MHz spectrum but if company decides to get extra slot somewhere, this EP will be adjusted accordingly. Currently working on what strategy AVI cartel has adopted and Idea having the highest EP indicates their 7 lost circles plus another 10 or 11 circles or if they are looking for extra spectrum they can get minimum 2 slots in all circles.

  • Saurabh November 7, 2012 1:26 pm

    KM :

    Ricky :
    Can anyone please explain what is “Earnest money deposit”, “Initial Eligibility Points” and “Net Worth”. What is the meaning of this terms?

    +1

    Earnest Money- The money a buyer deposits to the seller showing buyers’s good faith in a transaction. For example- You want to buy a property which is worth Rs.1 crore and you deposit some money with the seller say Rs.5 Lakhs. This 5 percent amount is the Earnest Money Deposit with the seller which is showing buyer is intended to buy that property.

    Net Worth- Net worth of an individual or a company is the amount left by deducting liabilities from the fixed assets. For example- A person has fixed assets like Home, Car, Cash totalling Rs.1 crore and a liabilities or debt of Rs.45 Lakh which is to be repay. So Net Worth will be 100-45= 55 Lakhs. With time, value of different things either appreciate like Home or other property and depreciates like Car, Electronic items etc. So networth keeps fluctuating with time.

    Eligibility Point- Department of Telecom had set eligibility points according to different circles and earnest money deposit for each slot which is 1.25MHz. The eligibility points for bidding in different category i.e Metro, A, B, C circles are different and same has been allotted to different companies according to their earnest money deposit which makes them eligible to bid. For example- Eligibilty points set by DoT for every slot of 1.25MHz spectrum for Mumbai circle was 105 and Earnest Money Deposit required was Rs.86 crores per slot. So if any company has chosen Mumbai circle to bid for 5MHz spectrum i.e 4 slots of 1.25MHz, they’ve deposited Rs.344 crores as earnest money to DoT and have been allotted 420 Eligibility Points. For some A category circles, Eligibility points per slot is 50 and for B category it is 16 and 10 and for C category it is 10 and 3.

    For complete detail for every circle’s E.M and E.P download Notice Inviting Application or NIA from DoT website.

    Until now, as per our calculations by looking at EM and EP, only Uninor’s position is clear to some extent that they are bidding for 9 circles they are operating in, assuming minimum 4 slots of 1.25MHz i.e 5MHz of spectrum.

  • shashee November 7, 2012 12:24 pm

    anybody tell me whether videocon going to shutdown? as they saying technical problem no body cant recharge stvs.

  • shashee November 7, 2012 12:23 pm

    anybody tell me whether videocon going to shutdown? as they saying technical problem no body cant recharge stvs…….

  • Gowrishankar November 7, 2012 11:32 am

    Dear All,
    Please any body tell whether airtel increased their tariff base plan in tamilnadu or not.. my call rate is 1.5 p/sec.. if confirm i’ll port in to BSNL 35 Rs 1p/2sec Scheme

  • Gowrishankar November 7, 2012 11:31 am

    Dear All,

    Please any body tell whether airtel increased their tariff base plan in tamilnadu or not.. my call rate is 1.5 p/sec.. if confirm i’ll port in to BSNL 35 Rs 1p/2sec

  • KM November 7, 2012 10:03 am

    Ricky :
    Can anyone please explain what is “Earnest money deposit”, “Initial Eligibility Points” and “Net Worth”. What is the meaning of this terms?

    +1

  • Amit Pandya November 7, 2012 9:51 am

    Government should stop this kind of auctions because it’s ultimately gonna raise tarrif for end users. Because companies are not doing social service it’s a pure business, under which cost incurred by firm will be finally borne by consumer.

  • hiteshanadkat November 6, 2012 10:45 pm

    Rcom&Ttsl don’t required this bcoz they are newr then opretor trio & yonger by almost 10 years & They are more wise. If slot will vacant government will give at cheaper price.
    They are not in hurry like this opretor had.

  • Nikhil November 6, 2012 10:27 pm

    These three players i.e Idead Vodaphone and Airtel will jointly manage the bid price lowest and then they will jointly loot indian customer by hiking price. Where is Aircel and Docomo in auction?

  • Ricky November 6, 2012 10:15 pm

    Can anyone please explain what is “Earnest money deposit”, “Initial Eligibility Points” and “Net Worth”. What is the meaning of this terms?

  • sourav November 6, 2012 8:52 pm

    nice..but plz tell us that which operator is going to bid in which circle?