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NEW DELHI: The government failed to meet its telecom auctions target for the year primarily because it overpriced the 700 MHz (4G) band, making it unattractive for telcos to bid for it.\n
\nThe government raised nearly Rs 66,000 crore from the sale of airwaves that ended on Thursday. The bidders have to pay about half the amount upfront this fiscal, which means the government will collect over Rs 32,000 crore, about half the Rs 64,000-crore target set in this year’s budget.
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\nSixty per cent of the airwaves that were put on the block remained unsold. The 700 MHz band accounted for half the unsold airwaves while the five other bands accounted for the remainder.
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\nAnalysts said the government had put huge quantities of spectrum under the hammer. In the bands apart from 700 MHz, companies bid tactically and beefed up capacities wherever required.
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\nThe irony is that the 700 MHz band is considered the most efficient for 4G services and telcos had been eyeing it for long. But despite the government offering 770 units of this band, telcos refused to bid as they found the reserve price of Rs 11,475 crore per unit exorbitant.
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\nA telco would have had to bid for a minimum block of 5 MHz, which would have meant shelling out a whopping Rs 57,425 crore to buy spectrum in the 700 MHz band.
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\n“Trai (Telecom Regulatory Authority of India) was wrong to recommend such a high reserve price. The government was wrong to accept it,” said the top executive of a leading telco.
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Bharti Airtel<\/a> Chairman Sunil Mittal<\/a> described the non-bidding because of high reserve price as a “missed opportunity”. “I hope the government will look into this and correct the particular part,” he said on Friday.
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\nIdea Cellular Managing Director Himanshu Kapania said the “issues” which the government had with the 700 MHz band were “well-established and well-articulated”. “By making 700 (MHz) expensive now you will only lose value because as 4G deployments happen, it will depreciate,” said Kapania, suggesting the government had made a mistake by setting the base price high.
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In an interview to ET on September 21, Mittal had said Trai had “erred” in pricing the 700 MHz band. “Nearly Rs 60,000 crore for 5 MHz for 20 years. If you see this equation, it doesn’t work. These prices are unreal,” he had said. Industry<\/a> executives and analysts said if the 700 MHz reserve price was reduced, telcos would participate in a fresh round of bidding and the government could meet the shortfall.
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\nGovt Blames Strained Finances
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\nBut the government appeared unsure and attributed the strained finances of telcos for their non-participation in the sale of airwaves in the band. Telecom Minister Manoj Sinha said given the strained financial position of telcos, “auctioning 700 MHz again this year does not guarantee that they will buy. The decision to auction will be taken by the government at the appropriate time”.
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\n“The direction that the industry has taken where they say that spectrum is very expensive-…Basis that, the government will decide when to hold the next auctions,” Sinha said.
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Analysts at Bank of America Merrill Lynch<\/a> and HSBC expect the failure to sell 700 MHz would nudge the regulator to lower prices, with HSBC predicting a 15-20% cut.
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\n“Such a move would price 700 MHz cheaper versus 900 MHz in select circles, after which some take-up in 700 MHz could be seen,” HSBC added. A leading analyst at one of the top four consultancies said the price of the 700 MHz band could be revised to Rs 36,255 crore for 5 MHz of pan-India spectrum, based on the GSMA study for pricing the band, pegging it to the winning price in the 1800 MHz band. “At that price, even if four telcos buy a slot each pan-India, the government could net over Rs 2.11lakh crore, which will mean an upfront payment of Rs 36,255 crore (25%) from this band alone,” the analyst said, giving an indication of the potential revenue missed by the government.\n\n<\/body>","next_sibling":[{"msid":54747586,"title":"Spectrum scarcity in India is now history: JS Deepak, Telecom Secretary","entity_type":"ARTICLE","link":"\/news\/spectrum-scarcity-in-india-is-now-history-js-deepak-telecom-secretary\/54747586","category_name":null,"category_name_seo":"telecomnews"}],"related_content":[],"msid":54747675,"entity_type":"ARTICLE","title":"Overpriced 700 MHz saw government miss auction target","synopsis":"The government will collect over Rs 32,000 crore, about half the Rs 64,000-crore target set in this year\u2019s budget.","titleseo":"telecomnews\/overpriced-700-mhz-saw-government-miss-auction-target","status":"ACTIVE","authors":[{"author_name":"Gulveen Aulakh","author_link":"\/author\/19656\/gulveen-aulakh","author_image":"https:\/\/etimg.etb2bimg.com\/authorthumb\/19656.cms?width=100&height=100&hid=268","author_additional":{"thumbsize":true,"msid":19656,"author_name":"Gulveen Aulakh","author_seo_name":"gulveen-aulakh","designation":"Assistant Editor","agency":false}}],"Alttitle":{"minfo":""},"artag":"ET Bureau","artdate":"2016-10-08 09:01:06","lastupd":"2016-10-08 09:03:20","breadcrumbTags":["Sunil Mittal","Airtel","Vodafone","industry","Merrill Lynch","spectrumauction2016"],"secinfo":{"seolocation":"telecomnews\/overpriced-700-mhz-saw-government-miss-auction-target"}}" data-authors="[" gulveen aulakh"]" data-category-name="" data-category_id="" data-date="2016-10-08" data-index="article_1">
新德里:政府未能满足其电信今年拍卖目标主要因为它贵700 MHz (4 g)乐队,使其不被电信公司竞标。政府筹集了近66000卢比从电波周四结束的销售。投标人必须支付大约一半前期本财政,这意味着政府将收集超过32000卢比,大约一半的价值64000卢比的目标在今年的预算。
百分之六十的电视被放在块仍未售出。700 MHz乐队占了一半未售出的电波,而其他五个乐队占其余的。
分析师表示,政府已把大量的频谱拍卖。乐队除了700 MHz,公司收购战术和加强能力所需的地方。
具有讽刺意味的是,700 MHz频带被认为是最有效的4 g服务和电信公司早就盯上了。尽管政府提供770个单位的乐队,电信公司拒绝报价,因为他们发现单位11475卢比的保留价格过高。
电信必须收购一块最小的5 MHz,这意味着炮轰高达57425卢比购买700 MHz频段频谱。
“火车(印度电信管理局)推荐如此高的保留价格是错误的。政府接受它是错误的,”领先的电信的高管说。
Bharti附近的旅馆主席苏尼尔•米塔尔形容高底价的non-bidding因为“错失良机”。“我希望政府将调查这和正确的特定部分,”他说。
想法细胞Himanshu Kapania董事总经理表示,“问题”,政府在700 MHz频带是行之有效的明瞭。“通过700 (MHz)昂贵的现在你只会失去价值,因为4 g部署发生,它会贬值,”Kapania说,建议政府犯了一个错误通过设置底价高。
在一次采访中,等9月21日,米塔尔所说的火车有“错”定价700 MHz乐队。“近60000卢比5 MHz了20年。如果你看到这个方程,它不工作。这些价格是不真实的,”他说。行业高管和分析师表示,如果700 MHz保留价格降低,电信公司将参与新一轮的招标和政府可以满足缺口。
政府指责财政紧张
但政府出现不确定,由于对电信公司财政紧张的同时在电波在乐队的销售。电信部长Manoj Sinha说,鉴于电信公司的财务状况紧张,“今年再次拍卖700 MHz并不能保证他们会买。由政府决定拍卖将在适当的时候”。
“方向谱的行业了,他们说很贵,…的基础,政府将决定何时召开下一次拍卖,”Sinha说。
美国银行(Bank of America)分析师美林(Merrill Lynch)和汇丰银行预计,未能出售700 MHz将推动监管机构更低的价格,与汇丰银行预测减少15 - 20%。
“此举将价格便宜700 MHz和900 MHz的选择圈,之后可以看到一些收在700 MHz,”汇丰银行(HSBC)补充道。主要四大咨询公司的分析师表示,700 MHz乐队可以修改价格36255卢比5 MHz pan-India频谱,根据GSMA研究定价乐队,盯住它赢得价格在1800 MHz乐队。“在这个价格,即使四个电信公司购买每个pan-India槽,政府可以净超过十万的2.11卢比,这将意味着一个预先支付36255卢比(25%)仅从这个乐队,”分析师说,给一个估计潜在收入由政府错过了。
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