Vodafone, RIL, Airtel gear up for fierce spectrum battle

Vodafone, RIL, Airtel gear up for fierce spectrum battle

Vodafone, Reliance Industries and Bharti Airtel are likely to put up a fierce fight for scarce telecom spectrum in the auction next month, if bank guarantees furnished by them are any indication.

Vodafone has offered a bank guarantee of Rs 2,800 crore while RIL arm Reliance Jio, which owns a nationwide licence for high-speed 4G mobile phone networks, has put in a bank surety of Rs 2,600 crore. Airtel has submitted Rs 3,700 crore in bank guarantees, sources privy to the development said.

The bank guarantees may indicate the amount of spectrum that the companies will bid for. Vodafone, RJio and Airtel may bid for the 900 MHz spectrum in Delhi and Mumbai.
Idea Cellular, which has put in a Rs 1,565 crore bank guarantee, may bid for 900 MHz in Mumbai.

Anil Ambani-run Reliance Communications' offer of a Rs 200 crore bank guarantee and Tata Teleservices putting in a Rs 267 (rpt) 267 crore surety indicate they may bid for small chunks of spectrum to fill gaps in their network.

Sources said Norway's Telenor has offered a Rs 330 (rpt) 330 crore bank guarantee, while Aircel has put in a Rs 100 (rpt) 100 crore surety.

While government officials confirmed the bank guarantee amounts of most bidders, none of the companies offered any immediate comments.

The government plans to sell spectrum in the 900 MHz and 1800 MHz bands. Bharti and Vodafone want spectrum in the 900 MHz band to renew their permits in cities like Delhi and Mumbai.

With 900 MHz spectrum, RJio will be able to provide all kinds of mobile services, including 2G and 3G services.

The government plans to offer 403.2 MHz of spectrum in the 1800 MHz band, in which frequencies were allocated to 2G licences in 2008, and 46 MHz in the premium 900 MHz band.

A new bidder has to buy a minimum of 5 MHz in the 1800 MHz band, while all players will have to bid for at least 5 MHz in the 900 MHz band.

RJio will be considered a new entrant in this auction and Uninor will be treated as a new player in service areas where it does not have operations.

A new player needs to submit a minimum bank guarantee of Rs 1,918.75 crore if it plans to bid for pan-India spectrum in the 1800 MHz band.

For the scarce 900 MHz band, companies are required to deposit Rs 438.75 crore as minimum earnest money if they want to bid in all three metros - Delhi, Mumbai and Kolkata.

For the 900 MHz band in Delhi and Mumbai, the two major metros, companies are required to provide a bank guarantee of Rs 172.5 crore each.

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