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India raises US$8.2 billion from wireless broadband auction

John Ribeiro | June 14, 2010
Qualcomm wins in four service areas

BANGALORE, 11 JUNE 2010 - India's auction of wireless broadband spectrum ended on Friday, after 16 days of bidding, with Qualcomm winning coveted slots in the cities of Mumbai and Delhi, according to data released Friday by the country's Department of Telecommunications (DOT).

The auction brings 385 billion Indian rupees (US$8.2 billion) to the Indian government.

The Indian government auctioned two blocks of 20MHz unpaired spectrum in the 2.3GHz band in each of the 22 service areas in the country. There were 11 bidders in the auction.

Qualcomm won a total of four slots across four service areas, including a slot each in Mumbai and Delhi. The company will be paying the government 49 billion.

Other winning bidders included India's largest mobile services company, Bharti Airtel, which won in four service areas. Another mobile services operator, Aircel, however, picked up eight service areas.

Reliance Communications, India's second largest mobile operator, said it had opted out of the bid last week as auction prices had exceeded "business case estimates".

Infotel Broadband Services Private, a local service provider, is the only firm to have won licenses to operate wireless broadband in all the service areas.

The auction results are provisional and need to be approved by the government.

Apart from 257 billion rupees earned in the auction from private companies, the government also stands to earn another 128 billion rupees from government companies who were allotted single slots in all circles, ahead of the auction for the private sector.

The government-run companies -- Bharat Sanchar Nigam and Mahanagar Telephone Nigam -- were allotted the slots on condition that they will pay a license fee equivalent to the maximum bid in the auction for each service area, DOT said earlier this year.

Analysts have warned that large outlays by some companies on the 3G auction last month and the auction on broadband wireless will push a number of operators into debt in an already very competitive market.

Qualcomm said in March that it is bidding in the auction to promote the LTE (Long Term Evolution) standard. In line with Indian rules, it will form a joint venture with Indian partners to set up a LTE network, and will exit the venture later, the company said on Friday.

The 3G auction earned the Indian government last month about 509.6 billion rupees from private companies. The Government service provider companies, which were allotted spectrum ahead of the auctions, were also required to pay fees equivalent to the highest bids in each service area, taking the government's total revenue to 677 billion rupees.

 

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