Mumbai: Indian Finance Minister Arun Jaitley may not be feeling elated. This is despite the fact that his exchequer is richer by more than Rs 65,789 crore as it is substantially less than what the government was hoping to get through spectrum auction.
After continuing for the last five days without pause, telecom spectrum auction ended today. Government received bids worth Rs 65,789 crore, a mere 40 per cent of the total worth of spectrum that was placed on the block. There were no takers for the expensive 700 Mhz and 900 Mhz bands during the course of the five days. The 700MHz band alone was expected to fetch Rs 4 lakh crore for the government.
While talking to a leading news agency a top government official said, “Bids worth about Rs 65,789 crore were received at the end of 31 rounds for 965 Mhz of spectrum out of total 2,354.55 Mhz put for auction”.
There are reasons that the government may be feeling worried for the lack of interest in spectrum. Around 60 per cent of mobile airwaves in value terms remained unsold in what was billed as the country’s largest spectrum auction where Rs 5.63 lakh crore worth of spectrum was put up for sale from October 1. Earlier in the day, total bids had dipped a bit to about Rs 63,325 crore at the end of the 26th round as compared to the previous closing. Activity, however, picked up the pace in the later rounds. Each round on Thursday was of 45-minute duration, unlike 60 minutes on the previous days.
Reports suggest that the bidding activity took place only in few circles with interest continuing to be largely around 1800 MHz and 2300 MHz that can be used by operators to provide 4G services. The industry also showed interest in 2100 Mhz (3G/4G) band, 2500 Mhz (4G) band and 800 Mhz (2G/4G) bands. The debt-ridden telecom industry was cautious in the auction and opted for low-priced spectrum that will help them improve mobile service quality as well offer next generation services in the world’s second largest telecom market. According to rating agency ICRA, the consolidated debt level of the industry stood at around Rs 3,80,000 crore in December 2015 against Rs 2,90,000 crore in March 2014.