Spectrum Auction Begins June 25: Jio Leads Bidding
Jun 24, 2024 19:15
India's 10th spectrum auction kicks off on June 25 with Reliance Jio as the top potential bidder for 5G services. The auction will cover eight bands, with Bharti Airtel and Vodafone Idea also participating.
Illustration: Uttam Ghosh/Rediff.com
New Delhi, Jun 24 (PTI) Spectrum worth over Rs 96,000 crore will be on the block as auctions across eight bands will begin on Tuesday, with telecom operators Reliance Jio, Bharti Airtel and Vodafone Idea vying for radio waves crucial for 5G mobile services.
The last spectrum auction was held in August 2022, which, for the first time, included radio waves for 5G services.
The government will auction eight spectrum bands for mobile phone services at a base price of about Rs 96,317 crore.
All the available spectrum 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 are part of the 10th auction.
"We welcome the government move to auction radio frequencies across the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz and 26 GHz bands. However, spectrum in 600 MHz and 1400 MHz should also be auctioned at an early date, as these bands are very important for the mobile industry," ITU-APT Foundation of India President Bharat Bhatia said.
Reliance Jio has deposited the highest earnest money of Rs 3,000 crore for the spectrum auction, which provides the company with the potential to bid for maximum radio waves.
According to pre-qualified bidder details released by the Department of Telecommunications, Bharti Airtel has submitted the earnest money deposit (EMD) of Rs 1,050 crore and Vodafone Idea (VIL) of Rs 300 crore.
According to telecom expert Parag Kar, Reliance Jio can bid for 37.36 per cent of the total spectrum value based on EMD, Bharti 13.07 per cent and Vodafone Idea 3.73 per cent.
As per Kar's analysis, Jio may be keen on bidding for 800 Mhz band only, which may lead to an estimated cash flow of Rs 18,000 crore.
"Bharti's targeted approach in the upcoming auction is aimed at consolidating and enhancing its spectrum efficiency. The total outflow for Bharti will be Rs 11,512 crore at the Reserve Price," Kar said in his blog.
Debt-ridden Vodafone Idea (VIL) is likely to focus on strategic acquisitions, particularly in the 26 GHz band, to bring down its spectrum usage charge.
Citing market claim, IndusLaw Partner Shreya Suri said Airtel too is looking to add additional sites for 5G coverage. The task will be selective, with a large focus on renewing the spectrum for existing sites.
"Vodafone, on the other hand, will potentially be reducing coverage in some circles and opting not to renew some of its spectrum," Suri said.
The spectrum auction is likely to see muted action, and the bidding is likely to be selective for specific bands.
The 3300 Mhz band may attract the interest of Reliance Jio and Bharti Airtel as it is one of the key bands for providing 5G services with low capital expenditure.
Radiowave chunks ranging from 20 Mhz to -100 Mhz are being put for auction in the 3300 Mhz band.
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