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June 12, 2010

India’s widely anticipated Broadband Wireless Auction ended after 117 rounds late yesterday, bringing in almost $5.5 billion for the government.

Infotel Broadband Services Ltd. was the biggest winner, paying $2.74 billion for broadband licenses in all 22 circles. A circle is defined as a specific broadband market in a large Indian city.

Indian conglomerate Reliance Industries Ltd. announced that it is buying about 95 percent of Internet service provider Infotel.

State-owned operators Bharat Sangar Nigam Ltd. and Mahanagar Telelphone Nigam Ltd. are both required to match the auction prices paid for their spectrum, bringing the auction proceeds to more than $8 billion.

Overall, things are run a bit differently when it comes time to do a wireless spectrum auction in countries such as India when compared to the way it's done in the U.S. or Canada.

Reliance, which is paying about $1 billion for Infotel, said it will use LTE (long term evolution) technology to bring mobile broadband services on its new spectrum.

“Reliance sees the broadband opportunity as a new frontier of knowledge economy in which it can take a leadership position and provide India with an opportunity to be in the forefront among the countries providing world-class 4G network and services.

A single 20-megahertz TDD spectrum when used with LTE has the potential of providing greater capacity when compared to existing communication infrastructure in the country,” the company said.

Overall, Reliance is India’s largest private-sector company, with a net worth of $30.6 billion.

Of all the eleven registered bidders, 6 won spectrum licenses. Other winners include Bharti (four licenses), AirCell, (eight licenses), Tikona, (five licenses) and Augere, (one single spectrum license).

All wireless spectrum licenses are provisional wins by the Indian government at this point.

The government in India has concluded its 3G auction last month, raising nearly $14.6 billion.

Interestingly, Qualcomm, which entered the spectrum auction to push LTE technology for the BWA licensees rather than Wi-MAX, picked up licenses in Delhi, Mumbai, Kerala and Haryan, paying just over $1 billion for the licenses.

The San Diego-based company said it would soon announce its Indian partners to comply with Indian Foreign Direct Investment regulations.

India is auctioning off its wireless spectrum for operating 3G services in the country’s 22 designated telephone service zones.

The government plans to sell 93 licenses to provide high-speed data to wireless phones, smartphones and tablet computers that may raise an estimated 500 billion rupees, helping reduce India’s rapidly rising fiscal deficit.

No less than nine mobile-phone wireless carriers including Vodafone, the world’s largest, and Bharti Airtel, India’s biggest, are vying for the mobile spectrum to offer 3rd generation services in the world’s second-largest wireless market in term of wireless subscribers.

In all, a total of 128 bidding rounds have been completed in the auction and bidding activity will be extended to all zones in round 132 slated for next week, the statement said.

India's government will issue daily updates on the bidding and all data collected from bidders will be made public after the auction has fully completed.

In April, the German government took the lead on the deployment of modern 4G technology with the launch of a new wireless spectrum auction involving 360 megahertz of spread across four bands: 800 MHz, 1.8 GHz, 2 GHz and 2.6 GHz.

Some wireless industry analysts were expecting the move, and think there's more of this to come in the next few weeks, as they expect other countries in Europe to follow through.

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Source: The Government of India.