The Indian government had decided to auction the license for Broadband Wireless Access spectrum. During the bid, two slots of 20 MHz of pan-India BWA spectrum will be auctioned. The bid started nine days ago and it touched an incredible Rs.8,980 crore on Thursday.
The Indian government has chalked out a plan through which they have divided the Broadband Wireless Access spectrum in 24 circles. All these circles are up for auction and private companies can bid for the spectrum. If a company wins the bid, they will be able to provide high speed internet services, internet telephony, TV relay services and high speed data transfer services. The government also fixed an All-India BWA spectrum fee at Rs.1750 crore.
The highest bid for the spectrum was made by the Mumbai circle, which fetched the government Rs.1404.17 crore. The second highest bid was that of Delhi. The Delhi circle was auctioned at Rs.1384.89 crore. The third highest bid came from the Tamil Nadu circle at Rs.1271.62 crore. The next highest bids came from Karnataka at Rs.1006.20 crore, Maharashtra at Rs.915.64 crore and Andhra Pradesh at Rs.903.33 crore.
Some circles fetched much more than what the government had expected. On the other hand, some circles, as many as 12, showed a negative demand and some (8 circles) showed no demand at all. Till now, the government has collected Rs.67,719 crore from the auction of BWA or the 3G spectrum. On Thursday itself, the government had earned a profit of Rs.26,940 crore from the sale of just the individual slots of Mumbai, Delhi and Tanil Nadu. At this rate, the government officials are expecting the total sales figure to touch Rs.94,659 crore. This is higher than the estimated total sales and profit figures of the government. The government had started the auction expecting a total revenue of Rs.35,000 crore.
It is quite interesting to note that eleven private players are vying for the 3G spectrum. Some of these companies are Bharti Airtel, Reliance, Idea Cellular, Aircel, Vodafone and Tata Communications Internet Services. Apart from these big players, there are also four new companies that are bidding for the Broadband Wireless Access spectrum. These companies include Augere, Tikona Wireless, Infotel Broadband Services and Qualcomm and Spice Internet and Infotel.
Though government telephone companies like Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) were given access to the 3G spectrum much earlier, it would not prove to be easy for them to retain the privilege any longer. First of all they will have to pay the same amount as the winning bid in each circle to the government and secondly, it would be quite difficult for them to stand in front of big private players and their aggressive advertising.
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