NEW DELHI: With all three major private sector telecom service providers having filed applications for participation in the upcoming 4G spectrum auctions in March, analysts expect the bidding to be the most competitive in 4G bandwidths that have the capability to eventually offer 5G services.
While the 3300-3600 Mhz band officially earmarked for 5G services has been left out of this round of auctions, over 2,300 MHz of airwaves is going under the hammer with an aggregate reserve price of Rs 3.92 lakh crore. Analysts expect the government to sell far less (at around Rs 50,000 crore), spectrum in certain bands are expected to see highly competitive bidding.
Bank of America Securities (BofA Securities) believes that the 2300 MHz band will see high bidding intensity since Jio, Airtel, and even Vi to a lesser extent, are all expected to bid for those assets. “We consider the upcoming spectrum auction to be an event which could help Jio and Bharti fortify their 5G positioning by acquiring good magnitude of 1800 and 2300 MHz (bands that could be used for 5G).
Conversely, we do not expect Vodafone Idea to be in a position to bid for 5G bands given its weak balance sheet,” it said. The DoT has also lowered reserve prices for the 800 MHz band that had remained unsold in 15 out of 19 circles during the last spectrum auctions in 2016.
According to ICICI Securities, the final reserve price for 800 MHz spectrum is 18.5 per cent lower than the October 2016 auction price, which should benefit the relevant operators. BofA Securities also says “the larger quantum of spectrum acquired by Jio/Bharti may surprise the market”. “Senior management is likely to think long-term,” it said.
Rs 3.92 lakh crore of spectrum on offer
While the 3300-3600 Mhz band officially earmarked for 5G has been left out of this round, over 2,300 MHz of airwaves is on offer with an aggregate reserve price of Rs 3.92 lakh crore