Spectrum auction today: India begins sale of airwaves worth Rs 96,317.65 Crore

5G Auction: India's 2024 spectrum auction kicks off today, June 25, with airwaves valued at Rs 96,317.65 crore up for grabs. Initially set for May 20, the auction was postponed twice. The government aims to raise around Rs 10,000 crore, though estimates from brokerages suggest the range could be between Rs 4,000 crore and Rs 16,600 crore. This follows the 2022 auction, which saw a record Rs 1.5 lakh crore raised.

Low Uptake Expected

Only about 17 percent of the spectrum value is expected to be sold, potentially the lowest uptake since 2014. Analysts predict that the spectrum will be sold near reserve prices due to limited demand.

Auction Details

The Department of Telecommunications (DoT) will auction frequencies in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands. The spectrum acquired will be valid for 20 years, with the option for telcos to share, trade, lease, and surrender the spectrum after 10 years.

Payment and Pricing

Telecom operators may opt to pay the full amount upfront to avoid the 8.65 percent interest rate for deferred payments, higher than the 7.2 percent rate in 2022. Payment options include part payments with moratoriums or 20 yearly installments, with the first due 10 days post-auction. Pre-payment is allowed without penalties.

The DoT has excluded the 600 MHz and 700 MHz bands from this auction and increased reserve prices by 12 percent for the 3,300 MHz band and 8.9 percent for the 26 GHz band. Spectrum prices have also increased by 11-14 percent in bands or circles that saw demand in the 2022 auctions.

Key Players and Strategies

Reliance Jio, Bharti Airtel, and Vodafone Idea are expected to be the main competitors, with a combined projected spend of about Rs 15,000 crore on 4G and 5G bands. These companies have submitted a total of Rs 4,350 crore as earnest money deposits (EMDs), enabling them to bid three to four times this amount.

• Reliance Jio: Submitted the highest deposit at Rs 3,000 crore.
• Bharti Airtel: Deposited Rs 1,050 crore, and is expected to spend Rs 10,400 crore to strengthen its sub-1GHz holdings and boost its 1,800 MHz and 2,300 MHz bands. The company faces renewals for 42 MHz of spectrum in six circles: Assam, Bihar, J&K, Odisha, UP East, and West Bengal.
• Vodafone Idea: Submitted Rs 300 crore and is anticipated to renew its 900 MHz spectrum in two circles—UP West and Bengal—picking up 5 MHz and 4.6 MHz, respectively.

Implications

As the auction unfolds, the results will significantly shape the competitive landscape of India's telecom sector, influencing the 4G and 5G deployment strategies of the major players. The outcomes will determine how effectively India can leverage 5G technology to drive economic growth, improve connectivity, and enhance the digital ecosystem.

Stay tuned for live updates and detailed analysis of the auction outcomes and their impact on India's telecom industry and broader economy.