It is a common perception that bidding in auctions should be driven by economic principles based on a sound business rationale. India has seen many different kinds of auctions and especially spectrum auctions provides us with a unique opportunity to analyse this hypothesis. Let’s start our investigation with the outcome of 3G auctions held in the year 2010 for the 2100 MHz band. 2010 band was particularly important as it became the reference price for future auctions and was also used for calculating losses on account of spectrum given away administratively. The following diagram provides a snapshot of the last 5 rounds of this auction.
The diagram lists the bidding activities of the 9 bidders in the 22 circles from round no. 179 to 183 (last round). The brown-colored cells indicate the provisional winning bidders for one block of 5 MHz spectrum in the 2100 MHz band. The operator with the darkest cell is ranked the highest with ranks decreasing proportionally with the intensity of the color. The topmost row of each block (representing a service area) indicates the RMS (Revenue Market Share) ranking of an operator as it was on the quarter ending March 2010. Here also, the RMS ranking is indicated by the intensity of the color which decreases as the color fades away.
