TELECOM – Page 5

The spectrum auction is shaping up better than the government expected, and a new milestone has been crossed -- the price of 900 MHz spectrum has crossed that of the 3G spectrum that was auctioned in 2010. As of Saturday evening, the price of a 5-MHz block of 900 MHz spectrum in Delhi was Rs 3,668 crore, about 11% more than the price discovered in the 3G spectrum auction in Delhi. Similarly, the cost of a 5-MHz chunk of 900 MHz spectrum has reached 973 crore in Kolkata, nearly double the 544 crore that companies paid for in the 3G auction in 2010. What is notable is that the high level of 3G spectrum prices were reached after 34 days of bidding, while the 900 MHz spectrum price has been reached after just six days of bidding. In other words, it could end up that 900 MHz spectrum is valued at two or three times what 3G spectrum was. Interestingly, Mumbai has not been seeing much action on the 900 MHz front for three days. As a result, in Mumbai, the price of 900 MHz spectrum is still below what was paid for 3G spectrum in 2010. One block of 5 MHz of 3G spectrum cost Rs 3,247 crore in 2010. However, as of Saturday, the price of one block of 5 MHz spectrum in the 900 MHz band was only Rs 2,815 crore. Industry officials believe that once the Delhi action settles, Mumbai prices will start moving up. Experts say that the fair price of 900 MHz spectrum should be at least double that of the 3G spectrum as 900 MHz spectrum is around twice as powerful as the 2100 MHz spectrum that was given out in the 3G auction. In other words, companies would need to put in only half the number of towers to deliver 3G on 900 MHz compared to 2100 MHz.

Tag: TELECOM

900 MHz spectrum price nearly double of 3G spectrum