5G spectrum auction: Bids come in for record ₹1.45-lakh cr on Day 1

S Ronendra Singh | Updated on: Jul 26, 2022

Mumbai, Maharashtra, 05/06/2018: Telecom tower maintainance worker at work on the highrise at Ghatkopar. At times when telecom companies jostling for the market after Jio launch, RIL's Mukesh Ambani set to disrupt the broadband and D2H market by launching of JioGigaFiber, the largest greenfield fixed-line broadband rollout anywhere in the world, with rollout happening across 1100 cities in India simultaneously starting August 15. Photo: Prashant Nakwe. | Photo Credit: PRASHANT NAKWE

For the first time, telecom players bid for 700 MHz

he much-awaited 5G telecom spectrum auctions kicked off on Tuesday and the government got bids totalling around ₹1.45-lakh crore in four rounds of bidding on the first day, breaking the previous record of ₹1.09-lakh crore in the 2015 auction.

The government has put a total of 72 GHz (gigahertz) of radiowaves worth at least ₹4.3-lakh crore up for the bidding.

Record collection

“By now four rounds have been completed and revenue expected from this is approximately ₹1.45-lakh crore. This is a record revenue collection... the previous record was ₹1.09-lakh crore. This is a very encouraging response and this much response for 5G clearly shows that the industry has turned from its difficult time caused by lots of litigations and other things. Now, at least it is turning into a sunrise industry,” Ashwini Vaishnaw, Minister of Communications and Information Technology, told reporters.

He said telecom service providers (TSPs) can now focus on investments, creating more employment, providing better quality of services and making sure that the country’s goal of taking ‘Digital India’ and telecom services to the last person of society in the most difficult areas.

4 firms in race

Billionaire Mukesh Ambani’s Reliance Jio, Sunil Mittal-led Bharti Airtel, Vodafone Idea and a unit of Gautam Adani’s flagship Adani Enterprises are in the race for 5G spectrum that offers speeds about 10 times that of 4G, lag-free connectivity, and enable billions of connected devices share data in real-time.

The auction is being 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.

“All the four participants actively participated in the auction. Allocation of the spectrum will start in record time and the target is to complete the entire process before August 14. Start of the services will be immediately after that and we should see commercial services by September-October,” Vaishnaw said, adding that the government was expecting bids of ₹80,000-90,000 crore on the first day.

700 MHz is key band

The 700 MHz, which did not see any bidding in the last two auctions (2016 and 2021), saw active participation this time and, according to sources, there was a bidding of around 40 per cent of the total spectrum on sale on the first day.

The auction will continue on Wednesday and, according to Vaishnaw, it may be completed “most probably” on the second day itself.

He noted that one benefit of the country is that the complete 5G stack is now ready, made in India with end-to-end technology. “The Prime Minister’s vision is that we should have good capabilities in 4G services, and should be even better going into 6G. They should be used not only in India but also exported,” he said.

On Chinese vendors

Asked if it could be an end of the era of Chinese equipment players (like Huawei, ZTE), Vaishnaw said, “Yes” as there is no fresh tender of equipment to the Chinese vendors because of ‘security’ reasons.”

According to analysts, there was 90 per cent participation from the industry on the first day; the auction will continue to see more bidding in bands like 2300 MHz on Wednesday.

“The first day of spectrum auction is in line with expectation, particularly for 3300 MHz and 26 GHz bands. It clearly highlights that the coveted 5G spectrum is much in demand. Bidding in the 700 MHz band was surprising considering the spectrum price. However, it is reflective of the need to provide pan-India coverage, especially in the rural areas,” said Prashant Singhal, EY Global TMT (Technology, Media and Telecom) Emerging Markets Leader.

There is no excess demand in any of the bands. If the trend continues, bidding is expected to be over as soon as 100 per cent activity is reached. The auction is likely to see bidding higher than market estimates, he added.

Published on July 26, 2022
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