NEW DELHI: The government is expecting to mop up nearly Rs 70,000 crore to Rs 1 lakh crore from the upcoming 5G auction to be held on July 26. According to the people familiar with the development, the government doesn’t expect all the spectrum, worth Rs 4 lakh crore, will be sold in the auction.
“We are going to put up the entire spectrum on auction, but it doesn’t mean all will be taken,” said an official. Last week, the cabinet approved a proposal of the Department of Telecommunications (DoT) to conduct a 5G spectrum auction, in which the spectrum will be assigned to the successful bidders for providing services to the public and enterprises.
According to the DoT, the auction will be held for spectrum in various Low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz) and High (26 GHz) frequency bands. The airwaves, at the reserve prices recommended by the telecom regulator, are valued at nearly `4 lakh crore.
Even analysts are of the view that telecom service providers - Reliance Jio, Bharti Airtel and Vodafone Idea - are expected to buy spectrum worth Rs 71,000 crore in the upcoming auction. According to IIFL Securities, these telecom operators are going to leave a vast majority of the radio waves going under the hammer unsold. “While supply is abundant, the government has not cut TRAI’s proposed reserve prices despite telcos’ assertion that these were still high. We see telcos bidding only for 4 of the 10 bands and spectrum should be sold at the base price. We estimate spectrum outlay of Rs 37,500 crore, Rs 25,000 crore and Rs 8,500 crore for Jio, Bharti and Vi,” said IIFL.
IIFL expects no bidding in the 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands. Bids for 3.6 GHz are somewhat tricky to predict. The report mentioned that telcos could bid for small quantities in the 3.6 GHz and 28 GHz bands, the prime radio waves for 5G technology. It said telcos may give the premium 700 MHz band spectrum a miss as they await further reserve-price cuts. It said if all telcos avail of the option of equal annual instalments over 20 years, the government would receive Rs 6,200 proceeds in the current financial year.
Telcos may give premium spectrum a miss
IIFL said telcos may give the premium 700 MHz band spectrum a miss as they await reserve-price cuts. It said if all telcos avail of the option of equal annual instalments over 20 years, the government would receive Rs 6,200 proceeds in the current financial year