By R. Jai Krishna
MUMBAI--The Indian units of Vodafone Group PLC and Telenor ASA
were among eight companies that agreed to pay a total of about
611.62 billion rupees ($9.8 billion) for airwaves in government
auctions that ended Thursday.
Revenue from the auctions surpassed the initial government
estimate of about 110 billion rupees. Earnings from the auction
will help the government achieve its fiscal deficit target of 4.8%
of gross domestic product for the year ending March 31.
Of that total, the federal government is to receive 182.96
billion rupees ($2.9 billion) before the end of March. The rest is
to be paid in 10 annual installments.
Federal Telecommunications Secretary M.F. Farooqui said the
outcome of the airwaves auctions "is a very good indicator," both
for the government and the phone companies.
Airwaves in the 900 MHz frequency were completely sold out,
while about 80% of spectrum put on sale in the 1800 MHz frequency
was taken by operators, Mr. Farooqui said.
Companies bid in two sets of auctions, one for nationwide use of
the 1800 MHz frequency and another to offer cellular-phone services
using the 900 MHz frequency in Mumbai, Delhi and Kolkata.
This was the third attempt in the past 18 months by the
government to auction cellphone spectrum. In the previous two
auctions, the government raised only 130 billion rupees of its goal
of 400 billion rupees. The most expensive blocs of bandwidth went
unsold because operators refused to bid, saying the reserve prices
were too high.
To ensure the latest attempt was more successful, the government
lowered prices and usage charges. It also made it easier for
companies to trade and share spectrum to attract more bids.
India's largest cellphone companies, Bharti Airtel Ltd. and the
local unit of Vodafone Group PLC, had to bid successfully to
continue services for the next 20 years in the country's three mega
cities.
Vodafone India Ltd. will pay 196 billion rupees in total for its
bandwidth, of which 56 billion rupees will be paid by the end of
March. It won bandwidth in India's three biggest cities and
acquired airwaves to expand operations in another 11 service areas,
it said.
The airwaves will "open doors to the next generation of mobile
technology," allowing the company to roll out fourth-generation
communications networks, Marten Pieters, chief executive of
Vodafone India said.
Bharti, the country's biggest operator, bid for bandwidth worth
185.30 billion rupees. The company, about a third-owned by SingTel,
won permits to continue operations in its major cities, and gained
spectrum to roll out high-speed networks, it said in a
statement.
Companies had to contend with the entry of Indian oil and gas
company Reliance Industries Ltd., a bidder with deep pockets.
Billionaire Mukesh Ambani's telecom venture, Reliance Jio Infocomm
Ltd., won bandwidth in 14 of the 22 service areas. But it wasn't
immediately known how much the company would pay.
Write to R. Jai Krishna at krishna.jai@wsj.com
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