India's 2014 2G auctions ended yesterday after just 11 days
and 68 rounds of bidding. Through these auctions, the Indian
government was able to raise Rs 61,162.22 crores from the sale of
353.2 MHz of spectrum, with the two circles of Delhi and Mumbai
accounting for 57% of the total money raised.
You can read what the participating telecom operators are saying
about the 2014 2G auction results here.
The auctions are likely to reset competition scenario in the
country. Considering large stakes are involved for the government
and telcos, we should not be surprised if the auctions go on for
over 100 days," said Hemant Joshi, a partner at Deloitte
Haskins and Sells, an audit and consultancy firm. "With the
very low ARPUs (average revenue per user) and proliferation of net
neutrality, telcos' profitability and cash flow will be
negatively impacted on account of the auctions and will further
leverage the strained balance sheet," Joshi said. "And
this will reduce the availability of funds for buying new
technologies and could delay or adversely impact the benefit
expected from the Digital India programme." The auction may
fetch the government over Rs.82,000 crore at the base price. The
eight bidders for air waves have lodged bank guarantees of
Rs.20,400 crore for the auction.
Given this fast progressing scenario, for a successful run in
the telecom industry, obtaining spectrum licenses was identified to
be the key.
It is with this background that the competition concerns in the
telecom sector are analyzed.
Whether its 2G/3G/4G – the game changer would be cost
effective data services.
The total spectrum put to auction is 103.75 MHz in 800 MHz band,
177.8 MHz in 900 MHz band and 99.2 MHz in 1,800 MHz band – a
total of 380.75 MHz in 800, 900 and 1,800 MHz. The government will
also put on sale 5 MHz in the 2,100 MHz band, which is used for 3G
services in 17 out of 22 telecom areas.
The reserve price approved is Rs.3,646 crore pan-India per MHZ
in 800 MHz, Rs.3,980 crore for 900 MHz band pan-India ; and
Rs.2,191 crore pan-India in 1,800 MHz band.
The government also approved a reserve price of Rs.3,705 crore
per megahertz for third generation services.
According to reports, the government expects to mop up
Rs.75,000-Rs.100,000 crore from the auction which was mandated
after the so-called 2G scam following the previous UPA
government's junking the auction system for a
first-come-first-serve basis spectrum distribution that led to
charges of large-scale corruption and eventual fall of the
government of Prime Minister Manmohan Singh.
"Industry is happy that they can expect more spectrum after
the auction. At the same time, they are deeply unhappy about the
limited amount of spectrum availability and the steep reserve
prices. The auction is starting at a high a base or reserve price;
the final price could be much higher. Telecom operators will have
to shell out a very large burdensome amount," Mahesh Uppal,
director of telecom consultancy firm Com First, told IANS.
However, Jaideep Ghosh, partner, KPMG Advisory Services, thought
the impact will not be so bad. "I think spectrum renewal plans
are factored in the business plans of the operators and the payment
has to be made over a period of 10 years. So I do not think for
operators it is a very humongous amount," Ghosh told IANS.
In December 2015, seven licences each of Idea Cellular and
Reliance Communications, four licences of Bharti Airtel and six
licences of Vodafone will complete their 20-year term after which
they have to be renewed.
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The Legal Metrology Act, 2009 was passed by the Indian Parliament in order to repeal and replace The Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.
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