3G auction snippets
The price for pan-India 3G spectrum across 22 circles reached Rs 4,324 crore on Monday, the third day of the auctions. This is a 5.85% increase over Saturday’s closing price of Rs 4,085. On Friday, the closing price was Rs 3,980 crore and the auction opened at a reserve price of Rs 3,500 crore. The percentage increase in the total bids on Saturday was just 2.63% compared to the 13.71% jump in the price on the first day of bidding. Bidding activity was maintained at 80% on the first three days of the auction, ensuring that bidders kept to the basic activity level. The actual price will only emerge when the activity level is at 100%. This translates to total earnings of Rs 17,636 crore from four pan-India 3G operators, up from Rs 16,677 crore on Saturday and Rs 15,920 crore on Friday. Some additional revenue will come from an extra slot in 5 circles. The fourth operator is BSNL/MTNL, which is not participating in the bid but will pay the market price for the spectrum allocated to them as determined through these auctions. The exercise is expected to raise over Rs 30,000 crore for the government and will bring in four to five players in 3G, ensuring adequate competition in this space. For the mobile consumer, 3G will bring in added features like high speed Internet, video, television and other next generation services. Like Saturday, the Gujarat circle saw maximum demand on Monday, closing at par with Delhi at Rs 416.42 crore and triggering a Rs 20.82 crore price increment for the opening bid on Tuesday. In contrast, the price increment for Delhi is Rs 4.16 crore. According to the auction rules, the level of demand sets off a metered price escalation of 1%, 5% or 10% as appropriate. Since five players ended up bidding for the three slots available in Gujarat, this must have triggered off the highest 10% price escalation.