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Updated: May 24, 2010 22:24 IST

BWA auction gets off to a good start

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The end of an inter-duct tube, which provides protection for fiber optic cables. File photo
The end of an inter-duct tube, which provides protection for fiber optic cables. File photo

The price of a national licence for wireless broadband spectrum rose by a good 34.46 per cent on Day 1 to touch Rs 2,353.18 crore today, assuring the government of a minimum revenue mop—up of Rs 4,706.36 crore.

Bharti, Vodafone, RCom and the Tatas are among the 11 bidders to acquire the two slots of the BWA (broadband wireless access) spectrum on offer. Telecom minister A Raja expressed optimism of netting Rs 15,000 crore from these auctions. The government has fixed the reserve price for a national BWA spectrum licence at Rs 1,750 crore.

As per the data on the DoT Website, bids for Delhi, Mumbai, Tamil Nadu, Karnataka, Gujarat, Maharashtra, AP touched Rs 233 crore each, while for Kolkata and Punjab, it was a poor Rs 88 crore. Kerala fetched Rs 76 crore, while Haryana, Rajasthan, West Bengal bid price touched Rs 60 crore.

Eight circles in the C—category circles saw negative demands.

There were excess demand in 12 circles.

All the 11 bidders put in their bids today. There is no separate estimate for BWA revenue generation. The government had earlier estimated Rs 35,000 crore from the sale of both 3G and BWA. The 3G auction, which concluded recently, has fetched Rs 67,719 crore to the government.

Other players in the BWA auction are Idea Cellular, Aircel, Augere Mauritius, Infotel Broadband Services, Qualcomm, Spice Internet Service Provider, Tikona Digital Networks and Vodafone Essar.

The reserve price is Rs 1,750 crore for a BWA spectrum licence. After experiencing success in 3G spectrum auction, the government is now hopeful that the BWA auction would also bring in a revenue windfall.

Global investment bank Rothschild and telecom auction services provider Dot.econ are advising the government on the BWA auction. Two blocks of 20MHz unpaired spectrum in the 2.3GHz band in each of the 22 service areas are up for bidding.

BSNL and MTNL, which have already been been given the BWA spectrum, ahead of the private players, will have to pay the equivalent of the winning bid in each service area.

Wireless broadband is expected to bring rapid deployment to the broadband business, just like it did for telephony a decade ago. The country has just 8 million broadband connections today, against 600 million phone connections.

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