India’s mobile phone market leaders have bid about $10 billion in a hotly contested auction for the country’s second-generation (2G) telecoms license, far exceeding the government’s target.
After a few days of bidding, the total far exceeds the government’s target of $1.8bn and underlines the industry’s fierce competition.
“The government is happy,” Telecoms Minister Kapil Sibal said in a press statement after the auction ended. “We will see a smile on the face of the finance minister.”
The winners, Bharti Airtel, Vodafone, and Reliance Industries, will pay at least $3 billion of the winning auction price upfront and the remainder through 2026.
The amount will be used to reduce the country’s budget deficit.
The market leaders’ heavy spending highlights the strong competition in the world’s second largest mobile phone market behind China.
The success of the auction is in marked contrast to previous auctions in 2012 and 2013, which both failed.