3G Auction Finally Ends

The auction of the country's 3G spectrum ended on Wednesday after 34 days of bidding, with the top three operators, Airtel, Vodafone and Reliance bagging licenses for the coveted Delhi and Mumbai service areas, according to data released Wednesday by the Department of Telecommunications (DOT).

The highest bid for a service area was in Delhi where a license now costs Rs. 3,300 crores.

This is close to the base price for a national license across all 22 service areas, which had been earlier set at Rs. 3,500 crores.

The Government is now likely to earn Rs. 50,960 crores from the auction.

No single bidder has won in all the 22 service areas. The Government auctioned three slots in most circles, with a fourth slot offered in some service areas such as the states of Punjab, West Bengal and Himachal Pradesh.

One slot in each service area was allotted ahead of the auction to government-owned service providers, BSNL and MTNL. These companies will be required to pay license fees equal to the highest bid in each service area, DOT said last year.

There were nine bidders for the auction, all of whom were incumbent service providers. Bharti Airtel, the largest operator, won in 13 service areas, as did Reliance Communications, the second largest operator. Aircel also won in 13 service areas.

Vodafone's Indian joint venture, Vodafone Essar, which is the third largest service provider, won in nine service areas.

The results of the auction are provisional, and subject to government approval, DOT said. The auction started on April 9.

The 3G auction is to be followed by another for spectrum for broadband wireless access (BWA) services. There are 11 bidders in this auction.

Out of the winners Airtel have won major circles like Delhi, Bombay, Andhra Pradesh, Karnataka and Tamil Nadu; Vodafone has won spectrum in Delhi, Mumbai and Tamil Nadu; Reliance will be able to launch their 3G services in both Delhi and Mumbai and Aircel will be able to do the same in Karnataka, Tamil Nadu and Andhra Pradesh while Tata are one of the winners in the Karnataka circle.

While a report in the Times of India speculates that the telecos will begin roll-outs by Diwali of this year, a report by Business Standard states that since the telecos will only be awarded spectrums in September, 3G services should only be expected in 2011. However, since most telecos already have the infrastructure in place for 3G services, we wouldn't be surprised if we see 3G on our phones before this year ends.