Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

3G auction ends: And the winner is...
Thu, 20 May Pre-Open

The 34-day auction of 3G mobile spectrum finally ended yesterday. The government has reaped a bounty given that operators have bid around Rs 677 bn for the much-sought after spectrum. Bharti Airtel and Reliance Communications have won the bids for 13 regions each. They would need to shell out Rs 123 bn and Rs 85 bn respectively for these wins. Vodafone won nine regions for Rs 116 bn.

These companies will now face the challenge of pricing their 3G offerings in such a way that creates demand for the service and at the same time is a profitable proposition for them. This however looks highly improbable in the initial years. This is considering India's 'ultra-low priced' telecom market that will make it difficult for these companies to get consumers to pay much higher prices for using 3G services.

After all, these companies will have fresh memories of the European experience at the start of this decade. Then, European telcos had booked heavy losses after they paid more than US$ 100 bn to buy 3G licenses and then not finding enough consumers for the same.

Anyways, the success of the 3G auctions is good news for the government. The Rs 677 bn mop-up will help the government cut its fiscal deficit to nearly 4.9% of GDP in FY11, from 5.5% targeted in the Budget. For mobile companies, it's a large sum of money that has to be paid out. And this is at a time when companies are facing severe pricing pressure in the 2G space!

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "3G auction ends: And the winner is...". Click here!


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Feb 23, 2018 (Close)