📷 Image Credits: Moneycontrol
In an effort to enhance telecommunication services in India, the government has initiated the auction of 5G spectrum, with major telecom companies participating in the bidding process. The auction, which commenced on June 25, 2024, aims to raise approximately Rs 10,000 crore, though estimates suggest the final amount could range between Rs 4,000 crore and Rs 16,600 crore. This latest auction follows the record-setting achievement of Rs 1.5 lakh crore in the 2022 auction.
Reliance Jio, Bharti Airtel, and Vodafone Idea are among the telecom giants vying for the spectrum. The government has set the reserve prices for the airwaves at Rs 96,317.65 crore. The auction comprises frequencies in various bands, including 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz.
To ensure transparency and accuracy in the bidding process, mock auctions were conducted earlier in June to familiarize bidders with the e-Auction platform. The bidders were then given access to the auction catalogue on June 24. Payment options for the spectrum include full upfront payments or installment plans with corresponding moratoriums or 20 yearly instalments.
Analysts predict that the spectrum prices may remain near reserve prices due to the lack of excess demand, with only about 17 percent of the spectrum value expected to be sold. The exclusion of the 600 MHz and 700 MHz bands in this auction, along with increased reserve prices in certain bands, is expected to impact bidding strategies of the telecom operators.
Reliance Jio, as the market leader, has deposited the highest earnest money of Rs 3,000 crore, followed by Bharti Airtel at Rs 1,050 crore and Vodafone Idea at Rs 300 crore. Each of these telcos is strategically planning their bids to secure spectrum that will enhance their service offerings and competitive edge in the industry. The spectrum acquired in this auction will be valid for 20 years, with provisions for sharing, trading, leasing, and surrendering after 10 years.
With the ongoing auction shaping the telecom landscape in India, industry experts anticipate significant developments in the connectivity sector as telcos strategize to secure the necessary airwaves for expanding their 5G services and maintaining service continuity across the country.
