The telecom spectrum auction concluded on Tuesday, a day after the bidding, with revenues of ₹ 77,814.80 crore. This amount surpassed the expectations of the government as well as analysts, with the focus being on renewing the Telecon expire spectrum and consolidating holdings in select bands.
Mukesh Ambani-led Reliance Jio was the largest bidder company, bagging 488.35 MHz spectrum for ₹ 57,122.65 crore, followed by Bharti Airtel bidding ₹ 18,698.75 crore for 355.45 MHz spectrum, while Vodafone Idea made ₹ 1,380. Bid only for 11.80 MHz. . The spectrum will be assigned to bidders for a period of 20 years.
The auction – for the first time in nearly five years, and among the lowest one with participation of only three players – saw sales of approximately Rs 92 3.92 lakh crore on seven bands of a total of 2308.80 MHz spectrum. Out of this, bids were received for 855.60 MHz or 37% of the spectrum.
At the end of the bidding for a total of six rounds, there was no bidding for the premium 700 MHz band as well as the 2500 MHz band. The 700 MHz band remained unsold during the last 2016 auction due to high prices.
The government expects to receive an advance payment of approximately ₹ 26,000–27,000 crore, of which ₹ 19,000–20,000 crore will come during the current financial year (before March 31, 2021), while the remaining payment will be received by December 2021. .
Telecom Secretary Anshu Prakash told reporters, “Our estimate itself was ₹ 45,000-50,000 crore and we got bids of ₹ .80 77,814.80 crore, which is much more than the expectations. In the “sector”.
“When we go for auction, we all have available airwaves, but we know that the bidder cannot buy everything, they only buy according to their needs,” he said.
In response to a question, the secretary said that the bid came largely on the reserve price. “… whether the bid is higher than the reserve price or not depends on the competition. There were only three bidders … So, each bidder feels that the position in each of their bands is strong. There will also be an auction of 5G. So I am not very sure if the telcos want to put all their resources in this auction. “
In a press statement, Reliance Jio said it acquired spectrum in the 800 MHz, 1800 MHz and 2300 MHz bands across all 22 telecom circles and the footprint of its owned spectrum increased by 55% to 1,717 MHz. Mr. Ambani, Chairman of Reliance Industries said, “With its increased spectrum footprint, we are ready to pursue digital footprint in India as well as prepare ourselves for the imminent 5G rollout.”
Bharti Airtel, which bid spectrum for all bands except 700 MHz and 2500 MHz, said that the spectrum received during the auction gives the company “the most formidable spectrum holdings in the country”. It says that it has secured the all-India level of sub-GHz spectrum, which will help to create coverage in its deepest indoor and every urban city. “All spectrum will be able to deliver 5G services to Airtel in future,” it said.
The firm led by Sunil Bharti Mittal also stated that the 700 MHz band did not receive any bids from the operators as it did not make any economic case for them based on high reserve prices. “The 700 MHz band coupled with the 3.5 MHz band has the potential to accelerate India’s progress into the top league of digitally enabled nations. Therefore, in the future the reserve pricing of these bands should be addressed on priority.
Meanwhile, Vodafone Idea, which bid for smaller volumes in the 900 MHz and 1800 MHz bands, said the company had entered the auction which was the largest quantum of spectrum with a much smaller fraction coming up for renewal. “We have used this opportunity to optimize the subsequent merger holding the spectrum, to create further efficiencies in some circles.”
Giving the details of the auction, the Secretary said that the total amount for auction in various bands, 65.22% was sold in 800 MHz, 38.87% in 900 MHz, 42.87% in 1800 MHz, 8.57% in 2100 MHz and 89.29. % At 2300 MHz. However, in terms of contribution to total government revenue from the auction, 800 MHz contributed 48%, followed by 1800 MHz (24%), 2300 MHz (17%) and 900 MHz (10%).
ICRA’s Assistant Vice President, Ankit Jain said that the spectrum auction results are higher than ICRA’s earlier estimates.
“Telco not only bid for renewal of the expiring spectrum but also focused on strengthening its spectrum holdings in the 800 MHz, 900 MHz and 2300 MHz bands. Although the sub-GHz band will be critical to 5G technology deployment as well as improving indoor coverage, the appetite for the 2300 MHz band stems from increased mobile broadband usage and thus the need for network capacity improvements. “
Mr. Jain said that while the value of the total spectrum is only 19% of the total value of the spectrum on offer, after the auction, by March 31, 2022, the industry’s debt levels would increase to about ₹ 5 lakh crore.
Majority of the payments by Reliance Jio will be for spectrum in 800 MHz band (pay 34,491 crore), followed by 12,461 crore for 1800 MHz band and 1 10,170 crore for 2300 MHz band. For Bharti Airtel, the highest payout is ₹ 6,448 crore for spectrum in the 900 MHz band, followed by 1800 5,816 crore for 1800 MHz, 3,070 crore for 2300 MHz, 8 3,008 crore for 800 MHz and 5 for 2100 MHz. 355 crores.