You must have heard about the telecom spectrum and coal block auctions which are underway in the country. Business page, any paper, every day, big numbers featuring big companies? Here is all you should know about this. And considering the crores of rupees changing hands over the next few days, you definitely NEED to know.

What's for sale?

Coal is divided into various blocks in states of Chhattisgarh, Jharkhand, Odisha etc. In all, there are 218 coal blocks in the country. Some come under government enterprises such as National Thermal Power Corporation (NTPC), Coal India Limited (CIL) etc and some are given to private companies.

Telecom spectrum consists of frequency bands that telecom companies need to provide any of their services. Available frequencies are 800, 900, 1800 and 2100 MHz.

While all frequencies are under the hammer, 900 MHz is the most expensive with its 3G capability and wide range, for the lower the frequency= farther signal range= lesser number of towers to be erected. 2100 MHz (3G spectrum) is globally used, so companies have shown interest for this as well.

Why an auction?

An auction is essentially a seller's market, where highest bid wins. And for you to even attract bidders, the service or commodity on sale needs to be rare or valuable and should have adequate demand.

Telecom spectrum and coal are scarce resources with widespread demand and uses. Multi-billion dollar industries run on these resources and a competitive market makes it ideal for them to be auctioned off profitably.