Home > Business > RCom, Bharti bag 13 circles in 3G bid; Govt gets Rs 67,710 cr

RCom, Bharti bag 13 circles in 3G bid; Govt gets Rs 67,710 cr

May 20, 2010

The auction for 3G mobile licence ended on Wednesday with RCom, Bharti and Aircel bagging 13 circles each, and will leave the government with a Rs 67,710 crore revenue windfall.

However, no single operator managed to bag all 22 circles on offer — the total bid price for which touched Rs 16,750.58 crore on the 34th day of bidding on Wednesday.

Anil Ambani-led RCom will pay Rs 8,585.04 crore towards the 3G licence, but the single largest outgo would be from Bharti that will pay Rs 12,295.46 crore.

Vodafone, which is second in terms of fee outgo, would be paying over Rs 11,617 crore for licence to offer high-speed voice and data service in nine circles.

Key circles Mumbai and Delhi went to Bharti, Vodafone and RCom.

Bharti complained that the auction format and severe shortage drove up the prices beyond reasonable levels.

The government had fixed a reserve price of Rs 3,500 crore for 3G spectrum and had originally estimated to raise Rs 35,000 crore from the sale.

“We would like to point out that the auction format and severe spectrum shortage, along with ensuing policy uncertainty, drove the prices beyond reasonable levels. As a result, we could not achieve our objective of pan-India 3G footprint in this round,” Bharti said in a statement.

Nine operators, who were in the fray for three-four slots of spectrum, had welcomed the format in the mock auction.

“They knew what they were bidding. I’m quite certain we should respect the market determined price,” telecom regulator J S Sarma said.

“I calculated Rs 35,000 crore (revenue from 3G and Broadband Wireless spectrum sale) in the Budget. I’m getting Rs 67,000 crore, almost double. So, (I will get) that much elbow room,” Finance Minister Pranab Mukherjee said on Wednesday.

The revenue mop up will help the government cut its fiscal deficit to nearly 4.9 percent from 5.5 percent of GDP projected in the Budget.

“I’m happy to see that the government is going to earn more than expected,” Telecom Minister A Raja said.

Delhi spectrum went for Rs 3,316.93 crore, while that the bid for Mumbai closed at Rs 3,247.07 crore.

The auction of Broadband Wireless Access spectrum will start in two days and could push up the government’s revenue mop up.

The reserve price for BWA radio waves is Rs 1,750 crore for pan-India licence and 11 players are in the fray to grab the two slots on the block.

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