The government will get a minimum of Rs. 16,750 crore in the current fiscal from spectrum auction, which has so far generated bids worth Rs. 56,554.92 crore after 42 rounds of bidding so far.
Telecom Secretary MF Farooqui said that there will be a realisation of at least Rs. 16,750 crore in the current fiscal if operators opt to pay in installments.
The bidders can pay the part of the money upfront and the remaining amount over a maximum of 10 yearly installments.
“A total of 42 rounds are over. Bids worth around Rs. 33,082.58 crore are received for 1800 Mhz and Rs. 23,472.34 crore for 900 Mhz, a total of Rs. 56,554.92 crore. Auction continues on Monday,” Mr. Farooqui said.
The auction is witnessing aggressive bidding in the premium 900 Mhz band from companies such as Vodafone, Reliance Jio and Bharti Airtel, with the price of Delhi circle already doubled to Rs. 733.63 crore per MHz from the base price of Rs. 360 crore. Mumbai has also seen over 70 per cent jump in the price to Rs. 563.09 crore per MHz.
It is a must for both Vodafone to get spectrum in 900 MHz band in Delhi, Mumbai and Kolkata and Airtel in Delhi and Kolkata if they want to continue operations in the band as their licences are coming up for renewal in November.
If the companies fail to get spectrum in 900 Mhz band, they have to shift their infrastructure to 1800 Mhz band to continue operations, which may cost huge capital expenditure.
Sources said as Reliance Jio is also bidding for the 900 Mhz band, thereby leading to a price rise. At present, Vodafone owns 8 Mhz in 900 Mhz band in Delhi and Mumbai while Airtel holds 8 Mhz in Delhi.
The government has already surpassed its estimate to garner Rs. 11,300 crore for the sale in current financial year.
The budget for 2013-14 set a total target of Rs. 40,874 crore from spectrum revenue in this fiscal and a bumper collection through airwaves auction would help government keep fiscal deficit under control.
The country’s fiscal deficit at Rs. 5.16 lakh crore has already crossed 95 per cent of budget target in the first nine months of 2013-14.