Major telcos submit applications for Oct spectrum auction

The fresh round of telecom spectrum auctions starting October 1 will see same operators participating that had bid in the last one held in February 2015.

According to sources from Department of Telecom, Aircel, Bharti Airtel, Idea Cellular, Reliance Communications, Vodafone, Tata Teleservices and Reliance Jio Infocomm (Jio) have submitted applications for the spectrum auction. Telenor, which did not particpate in the last year’s auction, did not apply this year too.

With the announcement of RCom and Aircel’s merger on Wednesday, it was uncertain on whether the two companies would go ahead for the bidding or Aircel would cancel its application, said experts tracking the industry.

While the merger will take at least six months to fructify, the auctions will begin from next month.

“We have received seven applications and all the major players have submitted their applications. We will be publishing ownership details of all applicants tomorrow (Thursday),” an official at DoT said.

The ownership details are the net worth of each company, which would help in maintaining transparency as the government or the companies can see each other’s net worth before the bidding process starts.

The auctions will see various airwaves worth ₹5.63 lakh crore go on sale in which mobile frequencies in all bands — 700 MHz, 800 MHz, 900 Mhz, 1800 MHz, 2100 MHz and 2300 MHz — will be put on the block.

All the radiowaves being put up for auction can be used for high-speed 4G services.

This is the first time the government will auction premium airwaves in the 700 MHz band. This is considered as the most premium as the cost of providing service is one-third of 3G under the 2100 MHz band. The 2500 MHz will also be put for sale for the first time.

The 700 MHz band alone has potential to fetch bids worth ₹4 lakh crore if the entire spectrum in it gets sold at the base price, but experts say a muted response in this band is expected, given the exorbitant pricing.

As per rating agency ICRA, the consolidated debt level of the industry stood at around ₹3.80 lakh crore in December 2015 against ₹2.90 lakh crore in March 2014.

Going forward, considering the estimated level of participation in the auction, the industry debt would go up to around ₹4.60 lakh crore, they said.

However, the Finance Ministry in the Budget pegged the revenue at ₹98,995 crore from the telecom space, which includes ₹64,000 crore from the upcoming auction of about 2,354.55 MHz of spectrum and the rest from various levies and services this financial year.