BWA auction: Centre to get Rs. 38,617 crore

In what is termed as the largest sale in recent years, the government has reaped a revenue of over Rs. 1.06 lakh crores from the sale of spectrum for both 3G and BWA. File photo: P.V. Sivakumar

The keenly-contested broadband wireless access (BWA) spectrum auction ended on Friday giving the government a bonanza of Rs.38,617 crore.

With this, the Centre managed to gross over a whopping Rs.1.06-lakh crore from the entire spectrum auction, of which over Rs.67,700 crore came from bidding for 3G spectrum.

The collection of Rs.1.06 lakh crore from spectrum auction will help the government reduce its fiscal deficit by almost 4.5 per cent and help fund various development and social schemes. Interestingly, the government had estimated just Rs.35,000- 40,000 crore from the entire auction process, but the intense bidding by top telecom players to participate in the booming Indian telecom sector belied all its expectations. While Internet service provider Infotel emerged the only pan-India winner for high-speed broadband spectrum at Rs.12,872 crore. Subsequently, Reliance Industries announced the acquisition of the company for Rs.4,800 crore.

This clearly underlines the ambitions of Mukesh Ambani to become a major telecom player in the country. Similarly, U.S.-based Qualcom bagged four telecom circles — Delhi, Mumbai, Kerala and Haryana — for which it would pay Rs.4,912 crore. Bharti Airtel, which bagged 13 circles in 3G auction, was successful in getting only four circles — Maharashtra, Karnataka, Kolkata and Punjab — for Rs.3,314 crore.

Aircel bagged eight circles, mostly in category B and C areas for Rs.3,438 crore, while Tikona Telecom won five circles — Gujarat, Uttar Pradesh East and West, Rajasthan and Himachal Pradesh.

Interestingly, four leading telecom players — RCom, the Tatas, Vodafone and Idea Cellular — failed to win even one circle. All these were successful in their 3G spectrum bidding.

They exited from BWA spectrum bidding due to high prices. “The winning bids, in our opinion, are in excess of what current broadband business cases can support and seem to reflect the effects of perceived scarcity of spectrum combined with the limited number of slots being auctioned. We are disappointed with the outcome of the BWA spectrum auction,'' Tata Communications said in a statement. As in 3G bidding, Mumbai and Delhi emerged as the most-valued circles at Rs.2,292.95 crore and Rs.2,241.02 crore, respectively. Now, state-owned BSNL and MTNL will have to match the winning bid amount in each circle.