Seven telecom companies have submitted Rs 14,653 crore as Earnest Money Deposit (EMD) for the forthcoming 2,355 megahertz of airwaves auction starting from October 1. The numbers are lower of the deposit of Rs 19,711 crore in February 2015 auctions by the same operators, when lesser bands were up for grabs.
Mukesh Ambani-led firm Reliance Jio alone has deposited the highest EMD of around Rs 6,500 crore, almost the same as the combined deposits made by the top three telecoms. As per the Department of Telecommunication (DoT), Vodafone India has submitted EMD of Rs 2,740 crore, Idea Cellular Rs 2,000 crore and Bharti Airtel Rs 1,980 crore. Beside, Tata Teleservices has submitted EMD of Rs 1,000 crore, Reliance Communications Rs 313 crore and Aircel Rs 120 crore.
EMD is indicative of a company's strategy to bid in specific circles and spectrum bands; it gives them eligibility points with regard to those circles. Accordingly Reliance Jio is the only company which has potential to buy spectrum in premium 700 Mhz at floor price in most of the circles as a pan-India bidder for 700 Mhz spectrum needs to have EMD of Rs 5,610 crore. This is the first time that government will auction the 700 Mhz band, considered to be the most premium as the estimated cost of providing service through it is about one-third of 3G under the 2100 Mhz band. Total spectrum worth Rs 4,01,975 crore in 700 Mhz band is being put up for auction.
The government is putting up large chunks of spectrum for sale, which should help in removing fragmentation and improve service quality. Mobile frequencies in all bands -- 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz -- will be put on the block in the upcoming auction. All the radiowaves being put up for auction can be used for providing high-speed 4G services. The government expects revenue of Rs 98,995 crore from the telecom space in 2016-17, which includes Rs 64,000 crore from the auction of about 2,354.55 Mhz of spectrum.
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