On Tuesday, the Department of Telecommunications (DoT) will start the auction of spectrum valued at Rs 96,317.65 crore. Analysts predict the auctions will be quiet because telecom operators made the lowest earnest money deposit (EMD) in the previous six auction rounds and because firms announced they will primarily concentrate on spectrum renewals. The sale of 10,523.15 megahertz (MHz) of spectrum across bands, with a reserve price of Rs 96,317.65 crore, was approved by the Union Cabinet on February 8. The unsold spectrums from the last sale will all be auctioned once more. A significant portion of the phone and data spectrum, including the 800, 900, 1800, 2100, 2300, 2500, 3300 MHz, and 26 GHz bands, is available for purchase.
According to the DoT, the three private sector telecom companies, Reliance Jio, Bharti Airtel, and Vodafone Idea, have combined to offer Rs 4,350 crore as EMD for the bidding. According to research, this is five times smaller than the previous 5G spectrum auctions in 2022. Businesses are allowed to bid on the number of circles and amount of spectrum they desire by using points that are awarded depending on the EMD amount they have paid. A stronger ability to make bids is indicated by higher points. Telcos can bid up to twelve times their EMD for spectrum. The market leader Reliance Jio’s cautious approach and the significantly reduced demand for spectrum mean that the auctions will be more subdued, according to a recent note from IIFL Securities.
The Telecom Act will take effect in several areas on June 26
The Department of Technology has revealed that Reliance Jio, Bharti Airtel, and Vodafone Idea have placed a combined ₹4,350 crore on the bidding table. According to Business Standard, this is five times smaller than the previous 5G spectrum auctions in 2022. Businesses are allowed to bid for the number of circles and amount of spectrum they desire by using points that are awarded depending on the amount of EMD (earnest money deposit) that they have deposited. A stronger ability to make bids is indicated by higher points. Telcos can bid up to twelve times their EMD for spectrum. The market leader Reliance Jio’s cautious approach and the significantly reduced demand for spectrum mean that the auctions will be more subdued, according to a recent note from IIFL Securities. According to Business Standard, the amount of spectrum available has decreased by more than seven times since 2022, even though all unsold spectrum from the last sale is now again up for purchase.
According to the report, Jio (108 million) and Airtel (72 million) have seen an increase in 5G penetration to roughly 20–22% of their respective customer bases. According to Mint, Airtel, which has enough spectrum for rural coverage, plans to build at least 25,000 5G stations in the circles of Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Kerala, and West Bengal. In the circles of West Bengal and Uttar Pradesh West, where renewals for 12 MHz in the 1800 MHz and 900 MHz bands were scheduled, Vodafone Idea has chosen not to renew a portion of its spectrum. According to the Mint story, as a result, it would wind up cutting its renewal expenditure from ₹1,500 crore to ₹200 crore for just the 900 MHz band.
Auction for telecom spectrum will begin on Tuesday
“The government will hold the spectrum auction on Tuesday, June 25, 2024, to enhance current telecom services and ensure service continuity. This is consistent with the government’s aim to provide all citizens with access to modern, reasonably priced, high-quality telecom services,” the statement read. The spectrum auction has been started by the Department of Telecommunications (DoT), and on March 8 a notice inviting applications (NIA) was released. “The following spectrum bands will be up for purchase in the next auction, according to the Ministry of Communications: 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz.
10,522.35 MHz of spectrum total, spread over multiple bands, is up for auction, with reserve prices valued at ₹96,238.45 crores, according to the statement. It is believed that the 26 MHz and 3300 MHz bands are appropriate for 5G services. With the greatest earnest money deposit of ₹3,000 crore for the spectrum auction, Reliance Jio can potentially bid for the most radio waves. The Department of Telecommunications revealed the pre-qualified bidder details. Bharti Airtel and Vodafone Idea (VIL) have deposited the earnest money deposit (EMD) of ₹1,050 crore and ₹300 crore, respectively. The 5G auctions, according to the director general of the telecom trade association Cellular Operators Association of India SP Kochhar, will accelerate the quick implementation of 5G services throughout the nation, resulting in increased coverage and significantly better connection. “The 5G spectrum auctions will guarantee that even the most remote regions of our nation have access to high-speed internet, thereby enabling more economic prospects and social growth by bridging the digital divide. The auctions also represent our dedication to “Viksit Bharat,” and Kochhar expressed confidence that the results will solidify the groundwork for an India that is prosperous and technologically advanced.