Rs 96,000-Cr 5G Spectrum Auction Set To Begin On Tuesday
The auction will feature airwaves in eight bands: 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3.3 GHz, and 26 GHz
The latest auction of 5G airwaves, valued at over Rs 96,000 crore, is set to begin on Tuesday. However, industry executives and analysts predict that the event will be notably subdued compared to the record-breaking 2022 auction, which amassed Rs 1.5 lakh crore.
The tempered expectations are attributed to major telecom operators—Reliance Jio, Bharti Airtel, and Vodafone Idea—already possessing sufficient 5G spectrum and the slow consumer uptake of 5G services.
The three telecom giants might collectively invest around Rs 12,500 crore in the upcoming auction, which is merely 13 per cent of the available spectrum worth Rs 96,320 crore, according to media reports. Bharti Airtel and Vodafone Idea are expected to primarily focus on renewing their current holdings in specific bands or making minimal additional purchases. Meanwhile, Reliance Jio, although not needing any renewals, may look to strengthen its position in the 1800 MHz band.
The earnest money deposits (EMDs) submitted by the telecom companies are significantly lower than in previous years, ranging from Rs 300 crore to Rs 3,000 crore. These figures represent the lowest EMDs since 2014 and are 79-86 per cent less than the deposits made during the 2022 auction.
Reliance Jio has submitted the highest EMD at Rs 3,000 crore, indicating its potential strategy to secure additional airwaves, particularly in areas where rivals need to renew their permits, possibly sparking bidding wars.
In the last 5G auction, Bharti Airtel faced fierce competition from both Jio and Vodafone Idea in UP (East) for the 1800 MHz band, which drove up the winning price by 76 per cent above the base price. Such competitive bidding could reoccur in select circles this time, although overall interest from the telecom firms is expected to remain low.
The auction will feature airwaves in eight bands: 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3.3 GHz, and 26 GHz. Telecom companies have the option to pay the entire amount upfront or in installments.
However, with the increased interest rate of 8.65 per cent for deferred payments, up from 7.2 per cent in the previous auction, companies may opt to pay upfront to avoid higher costs. If they choose the installment route, the government is expected to collect a modest Rs 1,200 crore in the first year.
