3G auction ends: What experts say?

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The auction for the 3G spectrum allocation is over., after a fierce bidding of 34 days. The all-India licence was last bid for Rs 16,751 crore. The government has garnered revenue worth Rs 67,719 crore. 

The 3G auction had commenced on 9 April and there were nine bidders in the fray for the slots of 3G spectrum on the block. The government auctioned three slots in 17 telecom service areas and four slots in the remaining five states of Punjab, Bihar, Orissa, Jammu and Kashmir and Himachal Pradesh.
Experts are divided as they raise concern on the absence of a pan India operator and the huge revenue dent that the 3G license fee will hit on the telecom conmpanies.

Latest comments

Kunal Bajaj, Director, Analysys Mason

"It is a little difficult to believe that and not a single operators emerged as a Pan India operator because if you look at the concentration of this about 80% of the entire auction value is bunched up into the category A circles. Only about 20% is actually distributed between category B and category C circle. So even if circles are pushed to the edge and they were forced to say that would save a bit of money in category B & C circle and invested in category A circle the difference would have been that much because the prices of that category A and Metro circle is already so high. So the price that one would have to pay to pick up the remaining B & C circles were almost be surrounding in such a large number.

"So surprisingly that some of the circles may have backed out. What we may see is that some of the carrier may have decided to choose one category A circle over another because that could make a real difference in the way the money is allocated and particularly if you have some carriers that are much stronger in Gujarat other than Maharashtra. They may have taken an internal call at they have to focus their synergies on one of the two states rather than spending money on all states."