By R. Jai Krishna
NEW DELHI--India generated a total of about 611.62 billion
rupees ($9.79 billion) from two government airwaves auctions to
wireless companies 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 to achieve a fiscal deficit target of 4.8%
of gross domestic product for the year ending in March.
Of the total, the federal government would get 182.96 billion
rupees ($2.93 billion) during the current fiscal through March,
while it would get the remainder in ten annual payments.
Federal telecommunications secretary M.F. Farooqui said the
outcome of the airwaves auctions "is a very good indicator," both
for the government and the companies.
Airwaves in the 900 MHz frequency were completely sold out,
while about 80% of spectrum put on sale in the 1800 MHz 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
total estimate of 400 billion rupees. The most expensive blocs of
bandwidth went unsold because operators refused to bid, saying the
reserve prices were too high.
In order to ensure the latest attempt was more successful, the
government lowered prices and usage charges. It also made it easier
for companies the trade and share spectrum to attract more
bids.
While welcoming the outcome, the wireless industry trade lobby,
the Cellular Operators Association of India, warned that operators
may end up taking huge loans that will hurt their profits because
of high interest payments.
The lobby group said it would "urge the government to reduce the
spectrum usage charges and the Universal Service Obligation Fund
levy to 1% to provide some relief to the telecom companies," Mr.
Mathews, who represents about a dozen companies including Vodafone
and Telenor, said.
Indian wireless operators pay a three percent of their revenue
as annual charges to use airwaves, and also a levy to the
government for building networks in rural areas.
Write to R. Jai Krishna at Krishna.jai@wsj.com
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