The End of biggest telecom bid ever happened in India

The biding for 3G spectrum which started on 9 th of April 2010 , came to an

successful end on 19th of May 2010.The 3G service that facilitates faster connectivity ,
new applications like internet TV, video streaming , audio – video calling , faster
exchange of data was called for bid , organized by the Indian Government and considered
as one of the most successful business bid ever happened in the history of Indian
business. At the end of the bid Government bagged Rs.67,718.95 Crore ($15 bn) which
has crossed around 30,000 crore more than the expectation .

Government has never expected to have such huge response as the auction for 3G
spectrum was made after the eleven years of its birth ( Globally first commercial launch
of 3G services was by NTT DoCoMo in Japan in October 2001, followed by SK Telecom
in South Korea in January 2002 and by KT, also of South Korea, in May the same year)
and almost at the end of its life as 4G spectrum is already in capturing the market .
Overwhelmed by this auction success the Finance Minister Pranab Mukherjee already
sain on 20th of May that this amount of revenue will certainly help to reduce the fiscal
deficit . 'The conclusion of 3G auction adds to the success of India's telecom sector and
its growth story and takes it a step forward. We are happy that it has concluded in the
estimated time,' The Cellular Operator Association Of India ( COAI) director general
Rajan S. Mathews told on19th , May Wednesday.

On 19th of May , the bid came to an end after 34th day from the starting day and after
180 round of bidding . Apart from public sector telecom operator Mahanagar Telephone
Nigam Limited (MTNL) and Bharat Sanchar Nigam Ltd (BSNL), nine other private
telecom services had taken part in that bid for 3G spectrum services for 22 circle (71
slots)which were geographically divided for this spectrum service . The telecom services
were, Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata
Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications .

The days before the concluding day of the auction , the discussion about the
historic bid was on and tracking the bidding process clearly showed a day by day
significant and constant hike . Like , on 15th May, bidding amount was Rs. 63,885.45
crore , on 17th of May it was Rs. 66802.48 crore and on 19th May the end result was
Rs.67, 718.95 crore.

According to the data on the Department of Telecommunication’s website ,Delhi

topped the chart , became the favourite of the bidders and claimed the highest bid of Rs.
3032.85 Crore followed by Mumbai stood at Rs.2,998.66 crore, Karnataka at
Rs.1,564.27 crore, Tamil Nadu at Rs.1,464.94 crore and Andhra Pradesh at Rs.1,280.79
crore. While Punjab, Orissa, Kolkata and Uttar Pradesh (west) witnessed more players in
the queue than the number of slots available. Maharashtra, Andhra Pradesh, Gujarat,
Jammu and Kashmir, Haryana, Madhya Pradesh, West Bengal(other than Kolkata) and
Rajasthan did not attract enough bidders.
 Among the nine main players Bharati Airtel came out as the highest bidder and
apart from Bharati airtel , Reliance coomunication and , Aircel also bagged the bulk of
the slots. Bharati Airtel , Reliance Communications and Aircel , have won thirteen circles
each in this auction and cumulative amount of these three companies are the 40percent of
the total bidding amount. According to some market analyst , reliance is considered as the
winner as Reliance play for both CDMA and GSM services. Bharti, which has won such
circles as Delhi, Mumbai, Andhra Pradesh and Karnataka will have to pay Rs.12,295.46
crore ($2.73 billion). Reliance, which won the bids for circles including Delhi, Mumbai,
Kolkata and Punjab will have to shell out Rs.8,585.04 crore ($1.91 billion).Aircel on the
other hand, which focused largely on south India, will have to pay Rs.6499.46 crore
($1.44 billion). Vodafone Essar, which won spectrum in nine circles, paid Rs.11,617
crore. Etisalat and Videocon telecommunications dis not win a single bid. BSNL and
MTNL, which have already been issued airwaves, will also have to pay the winner's price
in the respective circles.According to the auction documents issued , of the 22 telecom
circles, five states -- Punjab, Bihar, West Bengal, Himachal Pradesh and Jammu and
Kashmir -- have four private players. Other circles, including the Delhi, Mumbai,
TamilNadu and Kolkata, have three private players. The government has asked these
companies to pay the price within 31st of May and they can start the service from 1st ,
June.

The stock of these companies showed an overall leap after the end of the auction.
On the end of 19th May , in BSE , Bharati Airtel showed a hike of 0.91 percent , where
Reliance Communication was up by 1.5 percent , Idea Cellular was up by 0.95 percent ,
in Mumbai and Delhi circle MTNL was shoot up by 0.53 percent hike.

Now after the bid it is time to see how much profit these telecom services can
experience. The biggest block for these telecom company for 3G spectrum is the average
customer is not aware and familiar with these services and the mobile set supports 3G
technicalities is only 10 percent of the market . The average price of these sets are Rs.
5000/- which far above the lower band mobile set . The telecom services have to launch a
huge marketing strategy to make the popularity among the people.

These telecom companies made the promises to the customer to deliver You tube
experience , video chat , internet TV, music and video streaming , instant data transfer,
playing online games etc. The telecom industry is hoping to add up 20million new user
per month in next few months . They are trying to import cheaper sets from Singapore ,
Korea to make it more affordable to the customer .Now , after this historic bid it is , how
much success this 3G service get in this Indian Market .