India 3G Auction Update, Bids up 24 Percent from Base Price

By April 13th, 2010 AT 1:25 PM

India’s 3G bid price continued to increase steadily entered the third day. The pan-India maximum bid price on Monday was Rs.4324.19 crore, which is 24% more than the reserve price of Rs.3500 crore.The competition among the top telecom operators like Bharti Airtel, Vodafone Essar, Reliance Communications, Idea Cellular, and Tata Tele Services will be on peak in the bid for getting 3G airwaves in all 22 telecom circles.

The day 3 of the 3G auctions saw bids increase significantly particularly for Gujarat and Uttar Pradesh ( East) telecom circles with round 17 price of these circles set to rise by Rs.20.82 crore and Rs.15.76 crore respectively.

Gujarat telecom circle has emerged as the surprise hot spot and most attractive in the ongoing auction of spectrum for next generation -3G mobile services. While the highest bid so far for any circle has been for Delhi, at Rs.416.43 crore, Gujarat is just a tad behind, with a bid of Rs.416.42 crore. Gujarat also saw the highest number of bidders, five, while Delhi had four bidders.

Bids for Rajasthan telecom circle too increased at a healthy rate from Rs. 144.54 crore to Rs.159.47 crore. The price for Rajasthan at the end of round 17 will rise by Rs.7.97 crore.

However category ‘C’ circles failed to attract any bids and thereby any price rise making one wonder the ‘pan-India’ pitch made by the Government as well as interested bidders.

Delhi-NCR circle remained on top in terms of the provisional winning price at the end of 16 rounds, Gujarat joined the same league on Monday. While the provisional winning price at the end of round 16 in Delhi was Rs.416.43 crore, that in Gujarat was Rs.416.42 crore.

While India’s business capital Mumbai has been pushed to the seventh position now (lowest in A circle), down from second on the opening day.

According to the telecom minister A Raja, “the government had expected to earn Rs.35,000-45,000 crore from the 3G and broadband Aireless Access (BWA) auctions.”

From the on going 3G auction process it seems that India’s National Telecom backbone Bharat Sanchar Nigam (BSNL) would remain the biggest pan India 3G services provider, even after the launch of services by private operators (except in Delhi and Mumbai, where Mahanagar Telephone Nigam (MTNL) operates) because none of the mobile service operators interested to bid for Jammu & Kashmir, Assam,  and Orissa telecom circles.

State run Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) were given 3G spectrum ahead of private players and have already launched their 3G mobile services in more than 380 cities across India and they would have to pay highest bid price.

According to the announcement by Department of Telecommunication (DoT) the winners will be awarded 3G spectrum only in September-2010, which means commercial operations of 3G services by private operators should be possible only by the end of 2010 or early 2011.

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