4G Auction by year end – Govt’s Rs. 78000 crore bounty

First the 2G, then 3G and now its time for another high octane drama of 4G spectrum Auction. The 2G spectrum was sold very cheaply (and now licenses getting scrapped). 3G auction was bumper which raked in 70k crore rupees for Indian government. Now, its time for 4G auctions – and this one is expected to be even bigger!

Telecom Minister Mr. Kapil Sibal made a statement at Mobile World Congress function stating

“By the end of the year, we are actually going to auction 4G (spectrum). That is what our intent is. We have enough spectrum now to share with everybody,”

Like 3G auctions, 4G auctions are expected to give the center a much needed fiscal boost with all 6 blocks of available 4G spectrum going under the hammer. It is expected to fetch as much as 78000 crore rupees if all 6 blocks are sold and 58000 crore if 4 of them are sold!

With 122 2G spectrum licenses issued in 2008 being scrapped by Supreme Court, the re-auction process is expected to take not less than 400 days as per TRAI officials. The 2g spectrum re-auction is also expected to bring in handsome gains to the center, though probably not in this fiscal. The question mark remains as to what will operators do from the time 2G spectrum is actually cancelled and the re-auction takes place.

Although, telecom sector has been in continuous limelight for past 5 years, next 12 to 18 months are expected to be very interesting. Given the circumstances, some Operators may quit, some may merge, while others may come out winners. This is going to be time for telecom sector consolidation in India.

3G services have still not matured in India and Indian telecom consumers have not taking fancy to it. Given this scenario, it is possible that 4G auction may actually be a dud. Telecom Operators will be shy of spending big bucks on yet another spectrum. Instead, operators may stick to offering tried and tested 2G & 3G services, where they will not have to spend for upgrade their infrastructure.

Telecom Drama is not over – It is just getting started!