Indian spectrum bids exceed expectations

The bids in India’s 2G and 3G spectrum auctions have already surpassed the expected total of INR820 billion.

Although bidding for spectrum in the 2.1GHz band is still available in some circles, the combined sum of the current bids from the eight participating operators - Aircel, Bharti Airtel, Idea Cellular, Reliance Jio Infotel, Reliance Communications (RCom), Tata Teleservices, Uninor and Vodafone - exceeds INR940 billion ($15 billion).

While competition for spectrum in the 900MHz and 800MHz was expectedly strong, some circles saw winning bids of nearly three times the reserve price. Following the Supreme Court’s cancellation of 122 mobile licences back in 2012, this is the fourth set of auctions to have been held.

The auctions are particularly crucial for Idea, RCom and Vodafone, as each of them holds spectrum in the 900MHz band that will expire in certain circles over the course of the next year. In some of these circles, the price for this spectrum is now 75% more than the original base price.

Escalating reserve prices were met with opposition, with several operators arguing that they would drive up mobile rates. The Cellular Operators Association of India (COAI) claimed that the Digital India Initiative would be slowed and bids would be artificially raised if the government only made a 5MHz block available for auction. However, the Department of Telecom did not act on these concerns.



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