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The Department of Telecommunications (DoT) will begin the auction of Rs 96,317.65 crore of spectrum on Tuesday. With telecom operators making the lowest earnest money deposit (EMD) in the last six auction rounds, and companies announcing they will mostly focus on spectrum renewals, analysts say the auctions would be a muted affair.
On February 8, the Union Cabinet approved the auction of 10,523.15 megahertz (MHz) of spectrum across bands at a reserve price of Rs 96,317.65 crore. All unsold spectrums from the last sale will be up for bidding again. Airwaves in the 800, 900, 1800, 2100, 2300, 2500, 3300 MHz and 26 GHz bands, covering a large chunk of voice and data spectrum, are up for sale.
The three private sector telecom operators — Reliance Jio, Bharti Airtel and Vodafone Idea — have collectively put up Rs 4,350 crore as EMD for the bidding, the DoT has announced. This is five-times smaller than the last 5G spectrum auctions in 2022, data shows.
Companies get points based on the EMD amount they have deposited, which enables them to bid for the number of circles and quantity of spectrum they want. Higher points mean a higher capability to place bids. Telcos can bid for spectrum worth up to 12-times their EMD. Combined with much lower demand for spectrum and a cautious stance adopted by market leader Reliance Jio, the auctions will be a more muted affair, a recent note by IIFL Securities said.
Officials said all preparations have been made, and the online auctions will be conducted from the DoT’s war room at Sanchar Bhawan. The government has also successfully conducted a mock auction exercise on May 13-14, they added.
This year’s auction had been postponed twice, after the initial auction date of May 20 was announced.
Airtel in the lead
While all unsold spectrum from the last sale is up for bidding again, the quantum of spectrum on offer has shrunk by more than seven-times since 2022. The 700MHz won’t be available, given the low supply after Jio’s purchases in 2022 and subsequent allotments to public sector undertakings. The pricey but super-efficient 700MHz band had seen intense bidding in 2022 with large chunks picked up by Jio at an estimated Rs 39,270 crore.
Jio (108 million) and Airtel (72 million) have seen their 5G penetration rise to about 20-22 per cent of their subscriber bases. While network utilization is rising quickly, with 5G data accounting for 28 per cent of Jio’s wireless data traffic, enough runway is left, analysts believe.
Jio may pick up much less spectrum than it has initially indicated. The telco is widely expected to give the 800MHz band a miss, given that it is mostly unsold spectrum from 2022. IIFL Securities expects it to bid for the 1800MHz band only in four circles despite having made the highest EMD.

First Published: Jun 24 2024 | 7:34 PM IST
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