The Telegraph
Thursday , January 30 , 2014
CIMA Gallary

Spectrum contest in final lap

Mumbai, Jan. 29: Mukesh Ambani’s Reliance Jio Infocomm will be bidding for 2G spectrum in the 900 MHz and 1800 MHz bands in all 22 service areas in the February 3 auction, affirming its intention to challenge the Big Boys like Airtel and Vodafone.

On Wednesday, the department of telecommunications (DoT) put out a list of eight companies that have been declared as eligible to bid for the radiowaves in what looks to be an aggressively–contested auction next month.

Like Reliance Jio, Bharti Airtel, Aircel, Idea Cellular and Telenor subsidiary, Telewings Communications Services, intend to bid for spectrum in all 22 circles. Tata Teleservices will bid in all but Delhi, Vodafone will bid in 15 circles, while Anil Ambani’s Reliance Communications will vie for spectrum in 14 circles.

DoT also put out other details relating to bidders which show that Bharti Airtel has stumped up Rs 3,700.25 crore as its earnest money deposit — the highest among the eight bidders. As a result, it has been allocated 28,989 eligibility points in the auction.

According to the notice inviting applications (NIA) issued last December, the initial eligibility points assigned to each bidder is determined by the amount of earnest money deposit submitted by it.

The eligibility points will come in handy during the clock stage of the auction — and the points can dip or rise depending on how active it is after the first round.

Vodafone has submitted an earnest money deposit of Rs 2,800 crore earning 22,160 eligibility points. Reliance Jio put up Rs 2,596.25 crore to earn 20,613 eligibility points, while Idea Celluar deposited Rs 1,567 crore for 12,810 points.

The other four — Aircel, Tata Teleservices, Telewings, and Reliance Communications — have put up very small deposits which means they will need to be very active in the rounds to progress through the auction.

In the 1800 MHz spectrum, the block size has been diced up into small portions of 200 KHz (paired). For instance, in Calcutta, the 2G spectrum available in the 1800 MHz band is 26.80 MHz, which has been carved into 134 blocks of 200 KHz each.

Under the terms of the auction, a new entrant must bid for a minimum of 25 blocks in the 1800 MHz band, while an existing licensee has to bid for a minimum of three blocks.

The block size in the 900 MHz band — which is highly coveted because of its excellent propagation characteristics that require fewer base stations and, therefore, lower capital expenditure — has been pegged at 1 MHz (paired). Each bidder must bid for at least five blocks in the 900 MHz band.

Bidders whose licenses are due to expire in 2014 — which include Airtel and Vodafone in the 900 MHz band in the metro circles of Delhi, Mumbai and Calcutta — will also be treated as new entrants.