After ten days of aggressive bidding by the companies the government managed to raise Rs. 61,162 crore. This has surpassed the earlier estimate of Rs. 41,000 crore.
The final outcome has come as great relief for the government as the first two rounds of bidding held last year got tepid response because of higher base price.
The auction lasted 68 rounds and eight companies, including Bharti Airtel, Vodafone, and Reliance Industries Ltd, participated in the auction that began on February 3 to bid for 900 megahertz and 1800 megahertz band airwaves.
“The Auction of spectrum in the 1800 MHz and 900 MHz band that began on 3rd February 2014, has ended today”, a government statement said.
Bids have been received in all 22 Service Areas in 1800 MHz band and in all 3 Service Areas in 900 MHz band. Thus, bidding has taken place in all the Service Areas in both bands.
The 900 megahertz band was auctioned only in three cities - Delhi, Mumbai and Kolkata. The stakes were especially high for Vodafone and Bharti which use 900 Mhz. They had to join the auction after the Supreme Court refused to extend their licences, which expire in November 2014.
Airtel, whose licenses in Delhi and Kolkatta was due to expire in November, won back 900 MHz in both these metros and added the same in Mumbai. It also won 1,800 MHz spectrum in 15 circles. It put in total bid worth Rs 18,530 crore for a total of 115 MHz of spectrum in 900 MHz and 1800 MHz bands.
Vodafone retained existing 900 MHz spectrum in Mumbai, Delhi and Kolkata. It said that it bought 1800 MHz spectrum in 11 circles - Mumbai, Delhi, Kolkata, Karnataka, Kerala, Gujarat, UP East, Rajasthan, Haryana, Andhra Pradesh and Punjab.
Marten Pieters, MD & CEO, Vodafone India said that he was pleased to secure business for next 20 years in 3 most important circles –Mumbai, Delhi and Kolkata
Idea too acquired spectrum in the 900 MHz band in Delhi. (Read more) The Mukesh Ambani-backed Reliance Jio bagged 1800 MHz band in 14 circles out of the 22 on offer. This will help the company to not only offer data but also voice services in these regions.
Reliance Jio had earlier won the rights to offer 4G broadband services across the country. (Read: Who won where) In the 1800 MHz band, Airtel won in 15 circles,
Uninor confirmed that it has successfully acquired additional spectrum in the 1800 MHz band in four of its six existing circles – UP East, UP West, Bihar and Jharkhand and Andhra Pradesh - and in the new circle of Assam at an investment of INR 8,447 million. With this additional spectrum, Uninor will be able to enhance its voice and data capacity by approximately 20% to 25% in the four existing circles of UP East, UP West, Bihar and Jharkhand and Andhra Pradesh.
"It is critical that mobile tariffs remain affordable for the mass market after the auctions. With its auction strategy, Uninor has ensured that it can continue to offer the most affordable tariffs in each of its seven circles while maintaining a healthy business case. We have now secured a spectrum platform for continuing growth and profitability in each of our circles," says Morten Karlsen Sorby, nominated CEO of Uninor.
Telecom Secretary M F Farooqui. said the 1800 Mhz band requires higher capital expenditure. At a minimum, the government will get an estimated Rs. 18,200 crore this fiscal, much higher than budget estimate of Rs. 11,300 crore,
Telecom Minister Kapil Sibal said, "We will see a smile on Finance Minister Mr Chidambaram's face.”