Bidding in India's latest spectrum auction has now beaten the record set during the sale of 3G airwaves in 2010. By the end of business on March 18, authorities had raised a staggering 1.08 trillion Indian rupees ($17.3 billion) from the current sale, exceeding the INR1.06 trillion ($17 billion) generated by the auction in 2010.

What's more, the process has not yet finished. While the 2010 auction went on for 34 days and 184 rounds, this one has already raised even more cash for government coffers in just 13 days and 80 rounds. Operators are also bidding higher sums for a smaller amount of spectrum. Some 970MHz went under the hammer in 2010, including the pan-India broadband wireless access (BWA) spectrum. In the current auction only 385MHz is up for grabs.

That includes 103.75MHz in the 800MHz band, 177.8MHz at 900MHz, 99.2MHz at 1800MHz and 5MHz at 2100MHz. And authorities claim there has been interest across all these frequency ranges. "The bidding is taking place in all bands," said the Department of Telecom (DoT) in a statement. "There is robust bidding going on in the 1800MHz, 900MHz and 800MHz bands."

During preparations for the auction, India's government had set a target of raising at least $10 billion through the frequency sale. It has smashed that goal even though just 88% of the spectrum had been allocated to bidders on a provisional basis, according to the DoT, at the end of day 12. The implication is that bids are likely to increase further. (See India Spectrum Bids Trigger Debt Fears.)

"The majority of service areas are going at a premium over reserve price," said the DoT's statement. "The competitive bidding is expected to continue. There is still spectrum, which is yet to be sold."

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This is troubling for the service providers participating in the auction, which include Aircel Ltd. , Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Idea Cellular Ltd. , Reliance Communications Ltd. , Reliance Jio, Tata Teleservices Ltd. , Uninor and Vodafone India . While in a tight spot, the big players have little option but to bid aggressively to retain due-to-expire licenses in some areas. Bharti Airtel, Idea Cellular, Reliance Communications and Vodafone India all need to procure 900MHz licenses to continue to offer services in parts of the country.

"I call it a winners' curse," says an analyst advising one of the auction participants and wishing to remain anonymous. "The winners of the spectrum auction have a tough road ahead as they will need to work incessantly to justify the exorbitant price they have paid for the spectrum."

Operators may try passing these fees on to their customers, but doing so will not be easy in India's hyper-competitive market. Moreover, as the experience with 3G has showed, more advanced services will not take off while prices remain high.

After racking up huge debts as a result of bidding in the 2010 auction, operators were forced to postpone the launch of 4G services. Indeed, while Bharti Airtel is offering 4G in a few service areas, most of the BWA spectrum is still not being used. With bids in the current process crossing the 2010 level, consumers might have to wait even longer before they can start enjoying some of the "superfast" mobile services that other countries now take for granted.

 Gagandeep Kaur, contributing editor, special to Light Reading