India raises $17.6 bn from telecom airwaves auction

Tuesday 31st March 2015 14:18 EDT

India raised a record $17.6 billion from the sale of mobile phone airwaves in its latest telecom spectrum auction after 19 days of fierce bidding, telecoms minister Ravi Shankar Prasad said. Prasad said the government received bids worth almost 1.10 trillion rupees ($17.6 billion), topping the 1.06 trillion rupees it raised in 2010. The amount is a third higher than the government expected to raise.

Victorious bidders need to pay a quarter to a third of the winning price initially, and the rest by 2027. Spectrum revenue is key for the government to plug its fiscal deficit. However, the government's payday could be delayed as the final allocations to operators will take place after the Supreme Court issues its ruling on multiple cases questioning the auction guidelines and criteria.

The government did not disclose winning bidders and the regions in which they had won spectrum, but the country's top operators - Bharti Airtel Ltd, Vodafone Group Plc's India unit and Idea Cellular Ltd - are expected to have bought the major chunk of the 20-year licences on offer.

The bidding underscores the fierce competition in India's mobile phone market and the operators' big bet on the potential for mobile data in the world's fastest growing smartphone market.

"(The) competitive landscape in the telecom sector is becoming favourable for large telecom companies as they have consolidated their leadership over the last few years," Morningstar analyst Piyush Jain said in a note.

Cash-rich conglomerate Reliance Industries is also among bidders expected to spend big on airwaves as it looks to roll out pan-India 4G services, five years after buying its licence.

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