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India 3G Auction Winners

New Delhi: The Indian exchequer is set to swell by Rs 67,718.95 crore ($ 15 billion), with the conclusion on Wednesday of auctions for the crucial airwaves for third generation (3G) telecom services by private players.

The amount bid after 183 rounds of the 34-day auction is sharply higher than what was expected and appears set to prune the federal government’s fiscal deficit, pegged at Rs 381,408 crore ($ 84 billion) for this year, by nearly one percentage point.

The government had hoped to collect Rs 35,000 crore ($ 7.75 billion) after auctioning the airwaves for both 3G services and broadband. The auction for broadband spectrum is to begin only Saturday, with the potential to fetch another $ 7.5 billion to the government.

Even though no single player won a pan-India licence for 3G services, the cost is pegged at Rs.16,750.6 crore ($ 3.72 billion). The pan-India licence is now up nearly 378.58 percent from the Rs 3,500 crore set as the base price at the start of the auction.

The prized Delhi and the Mumbai circles have been won by Reliance, Bharti and Vodafone. In all, Reliance, Bharti and Aircel won the maximum number of 13 circles, followed by 11 for Idea, nine each for Vodafone and Tata, and three for S Tel.

Etisalat and Videocon, which also participated in the auction, could not win a single circle, according to the data posted on the website of the Department of Telecommunications.

The state-run Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, which have already been issued airwaves for 3G services, will also have to pay this winner’s price, collectively pegged at Rs 16,750.6 crore ($ 3.72 billion).

Slots for three-four players were available in the 22 circles into which the country was divided for 3G services that facilitate faster connectivity and applications such as Internet TV, video-on-demand, audio-video calls and high-speed data exchange.

Nine companies — Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications — took part in the online auction that started April 9.

According to the auction documents issued in February, of the 22 telecom circles, five states — Punjab, Bihar, West Bengal, Himachal Pradesh and Jammu and Kashmir — were to have four private players.

Other circles, including the Delhi, Mumbai, Tamil Nadu and West Bengal, were to have three private players.

The Delhi circle attracted the maximum bid amount of Rs 3,316.93 crore ($ 735 million), followed by Mumbai at Rs 3,247.07 crore ($ 721 million), Karnataka Rs 1,579.91 crore (1 million), and Tamil Nadu Rs 1,464.94 crore ($ 325.5 million).

At the other end of the spectrum, the lowest bid was for Jammu and Kashmir with Rs 30.30 crore ($ 673,000).

The auction was held on all days except Sundays and national holidays. The winning firms will have to deposit the money within 10 days from now and will be allowed to offer 3G services on a commercial basis from Sep 1.

Global investment bank Rothschild and telecom auction services provider dot.econ advised the government on the auctions.

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