Aggressive bidding in one spectrum band led to fall in net bid price

New Delhi, March 11: The Rs.1,800 crore drop in the total value of highest provisiol bids on the seventh day of e-auction of spectrum for telecom services was the result of a shift in the preferred band away from 900 MHz due to aggressive bidding, official data showed on Wednesday. In the 900 MHz band, there were two excess bids in terms of the blocks on offer at the end of Day One. But by the end of Day Seven, there was a shortfall of bids to the extent of 298 blocks. In the Bihar circle, for example, at the end of the first day and some six rounds of bidding, the highest provision bid was Rs.42.24 crore per block for the 900 MHz band, which almost doubled to to Rs.Rs.80.56 crore per block by the end of the seventh day. As a result, where there were bids for all the 31 blocks on offer for the Bihar circle at the end of the first, the seventh day saw six blocks going vacant, with offers for 25 blocks — a shift away from 25 blocks.  Such a scerio was even more stark for Himachal Pradesh. In this circle, there was, in fact, excess demand for 30 blocks after the first day of bidding. But as bidding progressed and the highest bid per block price rose from Rs.8.44 crore to Rs.11.6 crore, there were no offers made for any of the 62 blocks on the table in the 900 MHz band. “There was activity in two new service areas in 1,800 MHz band. There is a shift in activity from the 2,100 MHz and 900 MHz bands to 1,800 MHz and 800 MHz bands,” a senior official said after the seventh round of bidding concluded. The official said the bidding norms are such that it allows a company to withdraw an earlier offer for a particular band and make a bid in another band if it sees that such a switch will prove beneficial, fincially and in terms of spectrum magement and growth potential.  Hence, the number of blocks sold provisiolly at the highest bid price sees a drop. Thereby, the results the total value of bids for that circle under the band in question also sees a decline. “This is normal. As bidding progresses, this fluctuation settles down,” the official said. The fresh interest was seen in Kolkata where there were no takers for all the 35 blocks on offer in the 1,800 MHz band after the first day. (ians)