DoT’s sale of 290 MHz spectrum may find few takers

The Department of Telecom will sell nearly 290 MHz of spectrum in two different frequency bands in the next auctioning round.

The auction may, however, fetch lower revenue for the Government compared to the sale in February, when operators put in bids worth ₹61,000 crore.

That’s because the total quantum of spectrum being sold is lower than last time. Also, part of the airwaves being auctioned is the portion left unsold in February. If the spectrum did not find takers five months ago, it is unlikely to find buyers in the next round either.

The other dampener is the lack of contiguous 5MHz spectrum in many areas.

Operators prefer spectrum that is bunched together as they can use it for data services and it helps in better network planning. Airwaves that are broken up are valued lower.

According to the plan sent by the DoT to TRAI, 104 MHz in the 1800 MHz band and 184 MHz in the 900 MHz band will be put up for auction. Of this, 78 MHz is unsold from the last sale. In the 1800 Mhz band, more than 65 per cent of spectrum being sold is not contiguous.

Aggressive bidding In the 900 MHz band, 18 licences are set to expire in 2015-16. These belong to different players, including Idea Cellular, Vodafone and Airtel. The spectrum vacated by the three players will be enough to accommodate only two players in each circle.

Going by the previous auction round, the Government can expect aggressive bidding here as incumbent players try to retain their holdings and sustain services. But industry watchers say that if the Government wants higher revenue inflows, then 3G spectrum in the 2100 MHz band should also be put on sale.

About 15 MHz is available in the spectrum band but most of it is currently with the Defence forces.

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