Day one of the spectrum auction saw aggressive bidding by telecom companies, taking the bid amount up by as much as 44 per cent over the reserve price in some circles.
After seven rounds of bidding, the Government stands to net at least ₹42,000 crore, with bidding still open in at least three circles.
Bids were received for all 22 circles in the 1800 MHz band and three circles in the 900 MHz band.
As expected, the bidding was more intense for the 900 MHz band than the 1800 MHz band.
Mumbai bids
In Mumbai, for example, the bid amount stands at ₹473.24 crore compared to the base price of ₹327.5 crore for 1 MHz in the 900 MHz band. In Delhi, the bid amount is ₹428.92 crore, which is 19 per cent higher than the price at the start.
In Kolkata, the price has gone up by 38 per cent to ₹173 crore.
In the 1800 MHz band, bidding still continues in Gujarat.
The pan-India price for the 1800 MHz band moved up to ₹1,777 crore per MHz compared to ₹1,765 crore at the start.
There was no upward movement in the bid price for 10 circles.
In other circles there was only a marginal rise. Uttar Pradesh (west) and Bihar saw maximum interest.
Renewed interest
This is a considerable change from the last two rounds of spectrum auctions, which failed to generate much interest. The renewed enthusiasm among the existing operators is primarily driven by two factors: one, the reserve price has been reduced from earlier rounds and, two, a number of licences are set to expire this year.
No extension
Since the Government has decided not to extend the tenure of the 20-year licences, operators such as Airtel, Vodafone and Idea Cellular have no choice but to bid for spectrum, especially in the 900 MHz band.
Reliance Jio entry
The most important factor in this auction is the entry of Reliance Jio. The company had won broadband spectrum in the 2300 MHz band in 2010 but has not been able to launch services yet due to inefficiencies associated with the particular frequency band.
Lower bands
Additional bandwidth in the lower frequency bands, 1800 MHz and 900 MHz, could be useful for the company.
Though it is not yet known how Reliance Jio bid on day one, the increase in the price of the 900 MHz band clearly indicates that there is a battle on with incumbent players in Delhi and Mumbai.