India 3G auction gets underway

After inordinate delays, India's 3G spectrum auction is finally off to a running start, with a bid closing price of 40.85 billion rupees (US$923.2 million) on the second day of bidding, according to reports.

The closing price on April 10 after 10 rounds was just 2.6 percent higher than the last closing price of 39.9 billion rupees (US$899.5 million) registered during the first day of action, the Times of India reported yesterday. The auction began with a reserve price of 35 billion rupees (US$791 million).

The nine bidders in the pan-India 3G spectrum auction are vying for three operator slots in 22 service areas. This was according to a public presentation on the Web site of the Department of Telecommunications (DOT), which is parked under India's Ministry of Communications and Information Technology. A fourth slot is reserved for BSNL/MTNL which is not participating in the bid, but which will pay for the allocated spectrum at the market price determined by the auction.

An update on the DOT Web site Saturday revealed that Delhi and Gujarat were the two most sought-after areas. Over in Delhi, four bids were received for the three available slots, with the winning price at the end of round 10 at 3.9 billion rupees (US$88.7 million), subject to an increment of 39.2 million rupees (US$885,920).

Gujarat saw an excess of two bids for the three available slots and registered an increment of 188.6 million rupees (US$4.3 million) to boost its starting price from round 11 to 3.96 billion rupees (US$89.5 million).

The 3G auction exercise, which continues today, is expected to raise over 300 billion rupees (US$6.8 billion) for the Indian government, the Times of India said.

The BWA (Broadband Wireless Access) auction, which has 11 bidders vying for two operator slots servicing 22 areas in the country, will commence two days after the 3G auction has closed.