Telcos place bids worth ₹77,000 crores for 4G spectrum
Telecom operators on Monday placed bids worth ₹77,146 crore in India’s first 4G spectrum auction in more than four years against the government’s expectation of 45,000 crore, communications, electronics and information technology minister Ravi Shankar Prasad said.
The department of telecommunications (DoT) aims to raise at least ₹3.92 trillion in the auction of 2,308.8 MHz of spectrum. The auction will continue on Tuesday, the minister told reporters.
All three telecom operators — Reliance Jio Infocomm Ltd, Bharti Airtel Ltd and Vodafone Idea Ltd — which submitted earnest money deposits took part in the auction.
The minister said bids were received for radio airwaves in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz and 2,300 MHz bands. Spectrum in the 700 MHz and 2,500 MHz bands remained unsold on day one.
“Bidding will continue in the first half tomorrow (Tuesday)... There were three bidders in today’s auction versus seven players in the 2016 auction. Of the total spectrum put up for sale, bids of ₹77,146 crore were received,” Prasad said.
“Telecom operators seem to have bid marginally higher than I expected. However, it is still a fraction of the total spectrum put up for sale. In case of the 700 MHz band, telcos clearly found its high reserve price a deterrent. This (700 MHz) is a valuable spectrum and if it doesn’t get sold, the government may be forced to lower the prices. The players can afford to wait it seems,” said Mahesh Uppal, a senior telecom expert.
Jio has bid for 800 MHz spectrum which will expire in many circles, and high interest in the 2,300 MHz band, which is predominantly used for 4G in India, indicates that telcos are looking to improve their coverage and service quality, said Uppal.
The government received bids for 89% of the 2300 MHz band, while 65% of 800 MHz spectrum was taken. Airwaves in the 900 MHz, 1,800 MHz and 2,100 MHz saw 38%, 41% and 9% bids, respectively.
The minister indicated that the 700 MHz band, which has remained unsold so far, could be used for 5G auction. According to experts, spectrum in the 700 MHz band can support 5G because of its efficiency, which also makes it the most expensive among those put under the hammer.
“The legal process is that once the price of a spectrum band is put on auction, we will have to go to Trai (Telecom Regulatory Authority of India) for reconsideration of fresh price,” Prasad said.
The government will soon make an announcement on 5G trials, he said, but did not give a timeline for the auction of spectrum in the 3,300-3,600 MHz bands, earmarked by Trai for 5G.
A Parliament standing committee report tabled on February 8 quotes DoT secretary Anshu Prakash as saying the government will conduct 5G spectrum auction in the next six months.
Prakash told the committee that 5G, in DoT’s “own assessment”, will be rolled out by the end of 2021 but not on a pan-India basis. The next-generation wireless technology will be launched in “select areas where the demand would justify the capex”.
“India would like a robust 5G mechanism. We have also stated that we would like innovative products in India by Indian companies... Very soon, we will be coming out with an ecosystem for 5G trials,” Prasad said on Monday.