Idea Cellular LtdBSE 4.04 %, India’s third-biggest mobile operator by market share, spent 303.06 billion rupees ($4.84 billion) to buy mobile airwaves in the country’s spectrum auctions, telecom minister Ravi Shankar Prasad said on Thursday. That was the single biggest amount spent. Together with market leaders Bharti Airtel and Vodafone Group Plc’s India unit, the top three players paid 855.75 billion rupees, or about 78 percent of the total airwaves sold, according to figures provided by the minister.About 89% of the spectrum on sale has been provisionally allocated to bidders in the latest auction, the government said in a statement after the auction concluded on Wednesday. Operators will have to raise tariffs to pay for the spectrum said Rajan S. Mathews, director general, Cellular Operators Association of India or COAI, a lobby group that represents the operators.
The government expects to receive about 288.72 billion rupees ($4.61 billion) in initial payments, which winning bidders have to make by April 4.
“Government has won, but whether India and Industry will win is contingent on how the money collected is used for building telecom infrastructure. The debt burden for industry would definitely increase by 70-80% of the spectrum price paid,” said Hemant Joshi, a partner at consultant Deloitte Haskins & sells. “ While economics demand immediate tariff increase, market forces will determine the quantum and timing of the increase. Theis will further hasten the process of consolidation in the Industry.”