Once again its the auction season for telecom sector, the time to make bids to buy spectrums for themselves. All the leading telecom sector biggies have deposited almost a total of Rs 14,653 crore as the earnest money to take part in the auction.
This time it is expected to be the biggest ever auction as this much amount has never been submitted as earnest money in any auction before this. The auction is however to take place on 1st October, 2016 and Reliance Jio being the most eager contender this time has alone submitted around Rs 6,500 crore for this auction. This may be, up to some extent prove that this auction is going to be a big hit as well as some heated and aggressive bidding is also going to take place this time around.
Department of Telecom has given permission to RJio, led by the Ambani group to make bidding in all telecom circles and in any spectrum band too. This was not expected by the big players like Bharti Airtel and Vodafone, as they thought that Reliance will only be bidding for the 4G spectrum. Vodafone paid the second highest earnest money amounting to Rs 2,740 crore.
Third on the list was Idea Cellular which made the deposit of Rs 2,000 crore and after them was biggest of them all Bharti Airtel, who already having so many spectrum to its name is expected not to bid too much. Floor price of 700Mhz spectrum needs to be atleast Rs 5,610 crore, hence, RJio is the only one going to bid for this bandwidth spectrum.
Their bidding strategy was released when they deposited the earnest money for auction. The 700Mhz band will be open for bidding first time ever and only RJio is going to bid for it, hence they might as well get the spectrum at the base price. This will even strengthen the hold of RJio in the market as this will cut the cost to 1/3rd if compared to 2100Mhz 3G bandwidth. This is it for now, stay tuned for more interesting articles and news.