MUMBAI: Top telecom service providers Bharti Airtel and Vodafone India, plus Mukesh Ambani’s Reliance Jio, have made earnest money deposits (EMDs) of about Rs 3,000 crore each for the coming auction of spectrum, indicates they all would bid aggressively.
According to sources in the department of telecommunications, Idea Cellular and Tata Teleservices have deposited EMD of Rs 1,500-2,000 crore each. Uninor, Aircel and Reliance Communications have deposited Rs 1,000 crore each. Idea’s licences in nine circles of the country’s 22 circles are due for renewal, while RCom has to renew these in seven circles in 2015-16.
An operator has to deposit EMD in the form of bank guarantees to participate in the auction.The EMD varies between 16-25 per cent of the reserve price in a circle.
All these companies gave applications on Monday for the auction in the 800, 900, 1,800 and 2,100 MHz bands, slated to start from March 4. The government expects to get Rs 80,000-1,00,000 crore from the sale, of which Rs 25,000 crore will come this financial year.
Bharti Airtel and Vodafone have to buy back spectrum in the 900 MHz band as their licenses (six of Bharti and seven of Vodafone) are due for renewal in 2015-16. Reliance Jio will be looking to bid in the 1,800 MHz and 900 MHz bands, say experts.
In the previous auction, in February last year, Reliance Jio was able to get spectrum in the 1,800-MHz band in only 14 circles. The company, launching its fourth-generation (4G) long-term evolution (LTE) data services in June, has had to change tack from earlier, when it was depending only on the 2,300-MHz band for the LTE rollout. It has now decided to also use the 1,800-MHz band that is used globally for 4G.
The lone CDMA technology entity, Sistema Shyam TeleServices, has decided not to bid as “pricing of the 800-MHz spectrum is high and does not merit a strong business case”, raising questions on its expansion in India.
Along with other incumbents such as Airtel and Idea Cellular, Sistema Shyam has also challenged some of the conditions in the auction document at the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) or the courts. The cases are expected to come for hearing on Wednesday.
DoT on Monday moved the Supreme Court, asking the auctions not be stayed, the hearing for which has now been fixed for February 25.
