Phase III auction: Single channel in Bhubaneshwar undergoes most competitive bidding increment-wise

At the end of Day 21, 17 cities have got provisional winning price for their channels more than 100 per cent above their respective reserve prices

BestMediaInfo Bureau | Delhi | August 25, 2015

E-auction of the first batch of private FM radio Phase III channels re-commenced yesterday at 9.30 am. During the day, four rounds of bidding took place. Till now, 84 rounds of bidding are over. Bidding re-commences today at 9.30 am.

At the close of the 21st day of bidding, 94 channels in 56 cities became provisional winning channels with cumulative provisional winning price of about Rs 1,134 crore, against their aggregate reserve price of about Rs 459 crore. Thus, the summation of provisional winning prices surpassed the cumulative reserve price of the corresponding 94 channels by Rs 675.22 crore or 147.1 per cent. Overall, cumulative provisional winning price exceeded the total reserve price of the first batch, that is, Rs 550.18 crore, by Rs 583.90 crore or 106.1 per cent.

The auction for the first batch comprising 135 FM channels in 69 existing cities of Phase II began on July 27, 2015.

So far, 17 cities have got provisional winning price for their channels more than 100 per cent above their respective reserve prices. Ahmedabad, Amritsar, Aurangabad, Bangalore, Bhubaneshwar, Chennai, Delhi, Guwahati, Jaipur, Jodhpur, Kolhapur, Mumbai, Nasik, Patna, Pune, Rourkela and Varanasi got provisional winning bidders at prices more than double the respective reserve prices.

With the provisional winning price more than nine times the reserve price, single channel in Bhubaneshwar has undergone the most competitive bidding increment-wise. Price Increment Algorithm for the e-auction is based on the increment logic used by the Department of Telecommunications (DoT) in its auctions. As per this logic, there should be no increment for negative excess demand, some increment for zero excess demand and a fixed increment above a certain excess demand. Some increment for zero excess demand means that when demand is equal to supply, seller has right to increase price to see whether purchasers are there at increased price.

The Auction Activity Requirement (AAR) is 100 per cent. It was increased from 90 per cent after 59th Round on August 14, 2015. The channel allocation stage will continue till the bids are received for any of the 135 channels.

After the channel allocation stage is over, the frequency allocation stage will commence on the next working day. During this stage, the winning bidders will be allowed to select FM frequency for the winning channel from the frequencies already identified in the respective city and as mentioned in the Notice Inviting Applications (NIA) dated March 2, 2015. Frequency selection preference would be based upon the rank of the bidders, that is, Rank 1 bidder would have the first preference to choose from the frequencies already identified. It may be noted that all the identified frequencies were made available for selection and included in the NIA after the same was demanded by the industry during first pre-bid conference dated January 28, 2015.

Summary of 21 days of bidding:

List of cities and clock round price at end of Day 21 of the e-auction:

Click on the image to enlarge.

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