Day 1 of spectrum auction: Telecom companies place bids worth nearly Rs 11,000 crore in 5 rounds: 6 important things to know

Telecom operators have placed bids worth Rs 1,000 crore. PTI quoted unnamed sources as saying that bids worth Rs 11,000 crore were received after five rounds of bidding on the first day of the spectrum auction.

The Ministry of Communications has fixed the price of 10,500 MHz spectrum. An amount of Rs 96,238 crore has been allocated for the auction, the ministry said in a press release.

Telecom operators have placed bids worth around Rs 100 crore. “Bids worth Rs 11,000 crore were received on the first day. The auction will resume on Wednesday,” a source familiar with the developments told PTI.

According to data released by the Department of Telecommunications, most of the bids were received from companies for the 900 MHz and 1800 MHz spectrum bands.

According to the release, telecom companies like Bharti Airtel Ltd, Vodafone Idea Ltd and Reliance Jio Infocomm Ltd were the three companies that participated on the first day of the spectrum auction.

Reliance Jio has deposited Earnest money deposit (EMD) is the highest among the three bidders at Rs 3,000 crore, giving them maximum bidding power for radiowaves among the three competitors. Bharti Airtel has deposited the earnest money. 1,050 crore and Vodafone Idea An arrangement of Rs 300 crore has been made for this.

Here's what you need to know about it:

1. The next phase of the auction will be held on Wednesday, June 26 for the remaining spectrum bands.
2. According to the Ministry of Communications, spectrum bands like 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz are going up for auction.
3. The primary focus of both telecom giants Bharti Airtel and Reliance Jio has been on the 900 MHz and 1800 MHz spectrum bands. 15619.6 crores and Rs 21752.4 crore respectively.
4. After the auction is over, the spectrum will be handed over to telecom companies for 20 years and the lock-in period of the spectrum will be a minimum of 10 years, after which it can be surrendered.
5. The auction winners will be allowed to pay the amount due in 20 equal instalments while protecting the net present value (NPV) at an interest rate of 8.65 per cent.
6. Companies will not have to pay any spectrum usage charges (SUC) for the spectrum acquired from this auction, and the auction winners will not be required to submit any kind of financial bank guarantee (FBG) or performance bank guarantee (PBG).