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5G: All spectrum may not get sold; govt stares at shortfall

The auction, to be held on July 26, will be held for spectrum in the frequencies of 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 3,300 MHz and 26 GHz bands.

Department of Telecommunications, 5G, 5G services, 5G Technology, Business news, Indian express business news, Indian express, Indian express news, Current AffairsA report by IIFL Securities said that the auction may see bids worth Rs 71,000 crore. File

The Department of Telecommunications (DoT) is expecting to mop up between Rs 80,000 crore to Rs 1 lakh crore from the upcoming 5G auction, a senior government official has said. All the spectrum up for auction, worth around Rs 4 lakh crore, may not be sold, including in the premium 700 MHz spectrum band, the official said.

The auction, to be held on July 26, will be held for spectrum in the frequencies of 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 3,300 MHz and 26 GHz bands. “While we have put up all the spectrum for auction, we do not expect telcos to bid for all of it. We are expecting to receive bids worth Rs 80,000 crore to Rs 1 lakh crore. For example, the 700 MHz band may not have as much demand,” the official said.

The government’s estimates are in line with predictions made by analysts.

A report by IIFL Securities said that the auction may see bids worth Rs 71,000 crore. “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 in its report.

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The government has kept the reserve price of 5G airwaves unchanged, according to the Notice Inviting Application (NIA) issued by the DoT.

Telecom operators had asked for a reduction of around 90 per cent in the reserve price of airwaves from the 2018 levels. But the Cabinet’s final approval includes a price reduction of around 35-40 per cent, in line with the Telecom Regulatory Authority of India’s (Trai) recommendations.

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Specifically, the regulatory body had suggested that the base price for prime 5G band of 3,300-3,670 MHz be kept at Rs 317 crore per MHz — 35 per cent lower than the base price of Rs 492 crore per MHz announced in 2018. Similarly, for the 700 MHz, the price recommended by Trai comes out to Rs 3,297 crore, which is almost 40 per cent lower than prices recommended in 2018.

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First published on: 25-06-2022 at 03:20:19 am
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