The Department of Telecommunications on Saturday morning began the biggest-ever spectrum auction, where airwaves worth Rs 5.66 lakh crore were up for grabs. By 4 pm, the auction had entered its third round with most telecom operators focussing on the 1,800 MHz band, reported PTI. Besides, 10 bids were made in the 2,100 MHz band for the 10 slots on offer.

Seven telecom operators – Bharti Airtel, Vodafone, Idea Cellular, Reliance Jio, Reliance Communications, Aircel and Tata Teleservices – are participating in the sale to buy 2,354.55 megahertz of frequencies across seven bands – 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz.

The auction is significant as the airwaves can be used for 4G services. According to experts, it will help in doing away with fragmentation and improve service quality. This will, in turn, help the government achieve its revenue target of Rs 98,995 crore from communication services in 2016-'17.

Of the Rs 14,653 crore deposited as earnest payment for the auction, Reliance Jio had given Rs 6,500 crore, followed by Vodafone India with a Rs 2,740-crore deposit. Idea Cellular submitted Rs 2,000 crore, while Airtel's contribution stands at Rs 1,980 crore. The earnest money deposit gives the company eligibility points and indicates the circle and the band of spectrum for which it will make bids.

Based on the deposits, the telecom department said only Jio, Airtel, Vodafone and Idea can bid in any band of the spectrum, except the 700 MHz, in any of the 22 telecom geographical circles across the country. The 700 MHz band is the most premium one as one can provide 4G services through this frequency. It will cost companies about one-third the amount required to provide 3G services in the 2,100 MHz band. The 700 MHz band will be auctioned at a reserve price of Rs 11,485 crore per MHz, according to PTI. It alone can fetch bids worth more than Rs 4 lakh crore.

The government also hopes to assign the spectrum within a month from the date of payment. It takes 10 days to make a payment after the auction gets over, according to Business Standard.