SPECTRUM AUCTION: BIDS RISE TO RS 44,500 CRORE New Delhi The Hindu Business Line | The Economic Times

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Spectrum auction in the 900 MHz band intensified on the second day with the bid price rising 68 percent of the reserve price in Mumbai and by 47 percent in Delhi and Kolkata. At the end of 14 rounds of bidding Government stands to get at least Rs 44,600 crore compared with Rs 42,000 crore on day one. This is 20 percent higher than what the Government would have got if it sold all the spectrum put on the block at reserve price. Bid for 900 MHz band in Mumbai has reached Rs 552 crore for 1 MHz compared to the base price of Rs 327.5 crore. In Delhi, the bid amount is Rs 530 crore. In Kolkata, the price has gone up to Rs 183 crore. While this is still lower than what operators paid for 3G spectrum in 2010, analysts said that the bids could hurt the players.

Judging by the way the auction is progressing, we believe that the auction may turn out to be a 'winners curse' i.e., the telco winning spectrum may not be able to have an adequate RoE on the acquired spectrum, given the higher pricing of the spectrum. The more time the auction takes to end, the more risks we see to overbidding by telcos to acquire spectrum, in our view, said analysts at Goldman Sachs. For the 1800 MHz band, the bidding has almost got over in 16 of the 22 circles. Bidding for Gujarat and Uttar Pradesh (west) continued. Total bid amount for 1800 MHz across all 22 circles so far is at Rs 24,741 crore which is just 1.4 percent higher than what the Government would have got if the airwaves was sold at reserve price. In contrast, the total bid amount for the 900 MHz band is at Rs. 19,894 crore from three circles, which is 56 percent higher than the reserve price.