3G auction off to a smooth start

Bidding data to be made public after completion of the auction process

As many as nine telecom companies –– Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications –– are participating in the online auction process which will be held from 9 am to 7.30 pm on all days, except Sundays and national holidays. “The auction has started and it is going smoothly,” said a Department of Telecom (DoT) official.

Bharti Airtel, Reliance Communications, Vodafone Essar, Tata Teleservices, Idea Cellular and Aircel are bidding in an all-India basis, while Videocon, S Tel and Etisalat are bidding only for selective circles.

Valuations up

The winning of 3G spectrum will boost the valuations of companies as they get to offer premium services such as high-speed Internet and video calling on mobile phones.
Owning 3G spectrum will be a prestige issue for companies as it  will stretch their finances and weigh on their earnings.

It is a simultaneous auction of 22 service areas over a secure web site on the Internet. The auction has multiple rounds. During the e-auction, telecom operators will have to match the base price, set at Rs 3,500 crore for one 3G slot by the government. 

According to a senior DoT official, it is difficult to set a time-frame for the 3G bidding. “It may take even a month,” the official said.

The bid data will be made public after the completion of the auction.  The winning firms will have to deposit the money within 10 days after the auction. Successful bidders will be allowed to offer 3G services on a commercial basis from September 1. For broadband services, the auction will begin two days after the process concludes for 3G spectrum.
The DoT is hoping to earn Rs 40,000 to Rs 50,000 crore in selling of radio waves.