3G auction brings 66% of target in 7 days

Anandita Singh Mankotia

Within seven days of 3G spectrum auction, the government has netted Rs 23,000 crore, with one provisional bid for pan-India spectrum touching Rs 5,710.36 crore on Saturday. In a nutshell, the government has already mopped around 66% of the budgeted Rs 35,000 crore.

So far, 40 rounds of bidding have taken place with nine operators in the fray. Analysts feel that the auctions could be completed this week with the expectation that one provisional bid for pan-India spectrum would be around Rs 8,000-9,000 crore which would be around 2.5 times of the base price of Rs 3,500 crore.

Romal Shetty of KPMG said he expected one provisional "bid to be around Rs 7,000 crore after which competition would thin out with only bigger players being able to sustain".

Prashant Singhal, telecom analyst with E&Y, said, "We see the bid price closing between 2.5 to 3 times of the base price, which would be around Rs 8,500 to Rs 10,500 crore".

However, Manoj Mohta of Crisil Research said that "the 3G auction itself will dilute the margins of the companies and if a pan-India bid closes beyond Rs 6,200 crore, then the pressure on margins will be greater".

After having lost its numero uno position to Gujarat in terms of the highest bid, Delhi has regained its position with a bid of Rs 626.37 crore.

Mumbai had the second-highest bid at Rs 598.59 crore while Tamil Nadu logged in the third-highest bid of Rs 549.24 crore, followed by Gujarat that experienced negative demand at Rs 533.40 crore.

Maharashtra got a bid of Rs 533.37 crore, while Karnataka and Andhra Pradesh received bids worth Rs 507.97 crore and Rs 493.50 crore, respectively.

The bid for UP (East) was at Rs 228.59 crore, Uttar Pradesh (West) at Rs 225.74 crore, Rajasthan at Rs 220.70 crore, Madhya Pradesh at Rs 218.23 crore, Kerala at Rs 190.52 crore and Haryana at Rs 170.69 crore.

Kolkata and Punjab circles saw bid prices of Rs 174.25 crore and Rs 132.51 crore, respectively.

West Bengal saw a bid price of Rs 123.63 crore, with one circle witnessing negative demand. Himachal Pradesh, Bihar, Orissa, Assam, North East and J&K too continued to see negative demand at Rs 30-crore bid levels, except Bihar and NE where it was Rs 32.44 crore and Rs 30.30 crore, respectively.

The Centre is auctioning three 3G slots in 17 service areas.

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