India’s auction for 3G GSM Service licence ended on 21st May with bids for pan-India licence touching as high as Rs 16,751 crore which ensures the Government of India a revenue of Rs 67,719 crore.
India happens to be most lucrative market for telecom due to high population and low teledensity. In last 2 years we have seen hyper competition due to entry of 4-5 new telecom operator dragging the tariff plans to as less as half a paisa per second.
Recently all the telecom stocks have taken a beat due to low margins as well as market was sceptical that the telecom companies earnings would take a beating due to paying of license fees for 3 G spectrum as well as investment in creating the infrastructureand backbone for the same.
The 3G auction had commenced on 9 April, 2010.There were nine bidders in the fray for the slots of 3G spectrum on the block. The government auctioned three slots in 17 telecom service areas and four slots in the remaining five states of Punjab, Bihar, Orissa, Jammu and Kashmir and Himachal Pradesh.
India happens to be most lucrative market for telecom due to high population and low teledensity. In last 2 years we have seen hyper competition due to entry of 4-5 new telecom operator dragging the tariff plans to as less as half a paisa per second.
Recently all the telecom stocks have taken a beat due to low margins as well as market was sceptical that the telecom companies earnings would take a beating due to paying of license fees for 3 G spectrum as well as investment in creating the infrastructureand backbone for the same.
The 3G auction had commenced on 9 April, 2010.There were nine bidders in the fray for the slots of 3G spectrum on the block. The government auctioned three slots in 17 telecom service areas and four slots in the remaining five states of Punjab, Bihar, Orissa, Jammu and Kashmir and Himachal Pradesh.
BSNL would be remain the biggest 3G operator in India. Delhi circle emerged the most valuable circle at Rs.3317 crore, followed by Mumbai at Rs.3247 crore. Among the major bidders, Bharti Airtel (India's largest telecom as well as mobile company) paid Rs.12290 cr for 13 telecom circles, Idea cellular paid nearly Rs.5765 cr for 11 telecom circles, Vodafone Essar will paid Rs. 11617 crore for 9 telecom circle while Reliance Commmunication paid Rs 8583 crore for 13 telecom circles.
The spectrum price has turned exhorbintly high due to stiff competition, as well as shortage of 2 G spectrum. In 995 cases only established players have secured a place. It has also been observed that All these companies have gone for the Circle where they are already having strong positions that is in top 2, Indicating that they had no choice but to grab the license in order to retain their leadership as well as marketshare.
Its very unlikely that offering 3G services would fetch them much incremental revenue in short run and it would take long for them to breakeven. Its to be noted that combined license of Delhi and Mumbai circle is for Rs 6500 crores approximately which is 40% of PAN india license fees.
The Full List of 3G Winners (Private Operators )-:
Delhi & NCR: Vodafone, Bharti, Reliance Communications at Rs 3317 cr
Mumbai: Reliance, Vodafone, Bharti Airtel at Rs.3247 cr
Maharashtra & Goa: Tata Com, Idea cellular, Vodafone at Rs.1258 cr
Gujarat: Tata Com, Vodafone, Idea at Rs.1076 cr
Andhra Pradesh: Bharti Airtel, Idea at Rs.1373 cr
Karnataka: Tata Telecommunication, Aircel, Bharti at Rs.1580 cr
Tamil Nadu: Bharti, Vodafone, Aircel at Rs.1465 cr
Kolkata: Vodafone, Aircel, Reliance Communications at Rs.544 cr
Kerela: Idea cellular, Tata Telecommunications, Aircel at Rs.312.5 cr
Punjab: Idea Cellular, Reliance Communications, Tata Telecommunications, Aircel at Rs.322 cr
Haryana: Idea Cellular, Tata Telecommunications, Vodafone at Rs. 222.6 cr
Madhya Pradesh & Chattishgarh: Idea Cellular, Reliance Communications, TataTelecommunications at Rs.258.4 cr
Rajasthan: Reliance Communications, Bharti, Tata Telecommunications at Rs.321 cr
U.P. (West): Bharti, Idea Cellular, Tata Telecommunications at Rs. 514 cr
U.P (East): Aircel, Idea Cellular, Vodafone at Rs.364.6 cr
West Bengal:Bharti,Reliance Telecom,Vodafone, Aircel at Rs.123.36 cr
Bihar & Jharkhand : Stel, Bharti, Reliance, Aircel at Rs.203.46 cr
Orissa : Stel, Aircel,Reliance at Rs.96.98 cr
Assam: Reliance, Bharti, Aircel at Rs.41.48 cr
North East: Aircel, Bharti, Reliance at Rs.42.30 cr
Jammu & Kashmir: Idea, Aircel, Bharti, Reliance at Rs.30.30 cr
The winning telecom firms will have to deposit the money within 10 days from now. The successful bidders would be allowed to offer 3G services on a commercial basis from 1st September,2010.
State telecom operator BSNL and MTNL already received 3G spectrum outside the auction process, and launched 3G mobile services in more than 340 cities across India,but the they will have to pay the spectrum fees as per current price now.
The Full List of 3G Winners (Private Operators )-:
Delhi & NCR: Vodafone, Bharti, Reliance Communications at Rs 3317 cr
Mumbai: Reliance, Vodafone, Bharti Airtel at Rs.3247 cr
Maharashtra & Goa: Tata Com, Idea cellular, Vodafone at Rs.1258 cr
Gujarat: Tata Com, Vodafone, Idea at Rs.1076 cr
Andhra Pradesh: Bharti Airtel, Idea at Rs.1373 cr
Karnataka: Tata Telecommunication, Aircel, Bharti at Rs.1580 cr
Tamil Nadu: Bharti, Vodafone, Aircel at Rs.1465 cr
Kolkata: Vodafone, Aircel, Reliance Communications at Rs.544 cr
Kerela: Idea cellular, Tata Telecommunications, Aircel at Rs.312.5 cr
Punjab: Idea Cellular, Reliance Communications, Tata Telecommunications, Aircel at Rs.322 cr
Haryana: Idea Cellular, Tata Telecommunications, Vodafone at Rs. 222.6 cr
Madhya Pradesh & Chattishgarh: Idea Cellular, Reliance Communications, TataTelecommunications at Rs.258.4 cr
Rajasthan: Reliance Communications, Bharti, Tata Telecommunications at Rs.321 cr
U.P. (West): Bharti, Idea Cellular, Tata Telecommunications at Rs. 514 cr
U.P (East): Aircel, Idea Cellular, Vodafone at Rs.364.6 cr
West Bengal:Bharti,Reliance Telecom,Vodafone, Aircel at Rs.123.36 cr
Bihar & Jharkhand : Stel, Bharti, Reliance, Aircel at Rs.203.46 cr
Orissa : Stel, Aircel,Reliance at Rs.96.98 cr
Assam: Reliance, Bharti, Aircel at Rs.41.48 cr
North East: Aircel, Bharti, Reliance at Rs.42.30 cr
Jammu & Kashmir: Idea, Aircel, Bharti, Reliance at Rs.30.30 cr
The winning telecom firms will have to deposit the money within 10 days from now. The successful bidders would be allowed to offer 3G services on a commercial basis from 1st September,2010.
State telecom operator BSNL and MTNL already received 3G spectrum outside the auction process, and launched 3G mobile services in more than 340 cities across India,but the they will have to pay the spectrum fees as per current price now.
