Indian spectrum bids hitting new heights

Prices have escalated in India’s spectrum auction, hitting $8.46 billion after four days of bids, with competition particularly fierce in the Delhi and Mumbai circles.

The 1800MHz band attracted a cumulative $4.9 billion in bids, while the ostensibly more versatile 900MHz band drew in a significantly lower $3.5 billion. However, there are more frequencies available in the 1800MHz band.

Delhi and Mumbai are perhaps the most coveted markets in the country, and market leaders Bharti Airtel and Vodafone are desperate to retain their spectrum in these circles after the authorities decided that they could not simply renew their licences without fending off competition.

In both of these major metropolises, interest in the 900MHz band has soared – bids have exceeded the initial reserve price by as much as 78% in Delhi, and 72% in Mumbai. The current reserve prices were revised down significantly from the original suggestions by the Department of Telecoms, which were dismissed as too high.

Optimistic reserve prices were cited as a key reason for the failure of the DoT’s previous attempts to auction spectrum. Auctions in November 2012 were scrapped after 2 days, while another process in March 2013 lasted just one day. The latest round of auctions are already successful by comparison, but are still nowhere near matching 2010’s 34-day 3G auctions.

 

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