The dust on the issue of expensive 3G auction outcome has still not settled down. Even as the debate on who would be the ultimate bearer of such high costs of the third generation technology still continues, the process of fiery broadband wireless spectrum auctions (BWA) kicks off from today for 20 MHz of airwaves.
It needs to be pointed out that the reserve price for a pan-India broadband license stands at Rs.1750 crore, at half the base price of 3G spectrum. BWA spectrum is necessary for rolling out WiMAX services and enable internet access to various compatible devices.
Going by this trend of strong demand, analysts are forecasting that the BWA bandwidth would fetch a premium of about 4-5 times that of the reserve price of Rs.1750 crore from the sale of two slots of bidding process.
The 3G auction, which fetched the exchequer Rs.68000 crore from the sale of next generation air waves, ended last week igniting more than healthy response and demand for the premium airwaves, that rendered the spectrum prices so over valued that none of the telecom operators opted for pan-India presence.
The key factor that could raise the price of this 2.3 GHz spectrum could be the renewed demand from the new entrants who missed out on access to expensive 3G spectrum in the key circles based on soaring bid prices.
Gurdeep Singh, COO at Aircel, said,
‘‘we might consider it (bidding fiercely). BWA is critical technology for large corporate as well as SMEs (small and medium enterprises), so it can be a huge opportunity in major circles.”
An interesting inclusion in the list of bidders is sensed in the form of US-based chipmaker Qualcomm Inc, a leader in developing and delivering digital wireless communications. The company is interested in promoting the Time Division Long-Term Evolution (TD-LTE) standard.
Interestingly, the government had targeted Rs. 35000 crore from the sale of both 3G and BWA spectrum. However, the target has already been made from the 3G auction process, even as the exchequer seems all set to pocket another around Rs.15000 crore from the sale of BWA bandwidth.
So, Here is a quiz for you – Tell us the amount that you expect BWA Auction will generate. Lets see who comes the closest, we may just feature him on this blog ;)