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Wednesday, April 14, 2021

Spectrum Auction: Rs 77K-crore bids for 4G airwaves exceed govt expectations

Of the four rounds, there was 80 per cent bidding activity in the first two rounds, which increased to 90 per cent in the next two rounds.

Written by Aashish Aryan | New Delhi |
Updated: March 2, 2021 8:35:21 am
The unsold spectrum in the 700 and 2,500 MHz will be sent back to the Telecom Regulatory Authority of India for a fresh reference, DoT officials said, but did not comment on whether the government would be open to lowering the price.

The Department of Telecommunications (DoT) managed to mop up Rs 77,146 crore on the first day of auctions of spectrum for 4G airwaves, as against its expectations of Rs 45,000 crore, Communications Minister Ravi Shankar Prasad said on Monday.

The DoT expects upfront payment between Rs 12,000 crore and Rs 13,000 crore for this and the next financial year from the three private telecom players — Reliance Jio, Bharti Airtel and Vodafone Idea — that bid for the airwaves this time, Prasad said. This is against the government’s own estimates of Rs 6,000-7,000 crore in the current fiscal.

Of the four rounds, there was 80 per cent bidding activity in the first two rounds, which increased to 90 per cent in the next two rounds. The government expects two more rounds of bidding on Tuesday. As per the norms, the spectrum sold will be valid for 20 years. For the auctions this time, the government has put on offer frequencies in the 700, 800, 900, 1,800, 2,100, 2,300, and 2,500 MHz bands. A total 2,251 MHz of spectrum for a reserve price of Rs 3.92 lakh crore are up for bids.

On Monday, the government received bids in the 800,900, 1,800, 2,100, 2,300 MHz bands while no bids were received in the 700 MHz and the 2,500 MHz bands. Government officials, however, said that price of high base price 700 MHz band and the fact that it can also be used in 5G services could be the reasons the spectrum in that band remained unsold.

“If we exclude the 700 and 2500 MHz bands, the bidding in the rest of the bands represents 60 per cent of spectrum put to auction,” Telecom Secretary Anshu Prakash said.

Compared to 7 bidders in 2016, auctions this time had only three bidders, which placed bids for 37 per cent of the bids on offer by quantity and 19 per cent by value. Among all spectrum bands that were sold Monday, about 65 per cent of the airwaves were sold in the 800 MHz spectrum, while about 89 per cent of spectrum on offer was sold in the 2,300 MHz band. In the other bands, the three private telcos bid for 38 per cent in the 900 MHz, 41 per cent in the 1,800 MHz and 9 per cent in the 2,100 MHz spectrum bands. The bidding in the 800 MHz spectrum represents 50 per cent of the total airwaves sold on Monday, DoT officials said.

The unsold spectrum in the 700 and 2,500 MHz will be sent back to the Telecom Regulatory Authority of India for a fresh reference, DoT officials said, but did not comment on whether the government would be open to lowering the price. In the absence of any auction for 5G airwaves, most experts had expected the auction to be subdued. Having collected nearly Rs 77,000 crore, government officials said the auctions had exceeded their estimates and would fetch in some more on Tuesday. “We will be coming out with details on 5G trials, real time testing and other details very soon,” a senior DoT official said.

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