The first spectrum auction in India in two years got off to a slow start on Tuesday. Telecom operators bid a total of ₹11,000 crore for 150 Mhz of spectrum, a far cry from the ₹96,320 crore worth of airwaves on offer. This suggests a subdued auction compared to the record-breaking 2022 sale.
According to officials, the most activity was observed in the 900 Mhz and 1800 Mhz bands, with some bidding in the 2100 Mhz band. Bidding is expected to continue in these bands on Wednesday.
“On the first day, ₹ 11,000 crore has been committed, bids for 150 Mhz have been received in five rounds. Most activity has been seen in the 900 Mhz and 1800 Mhz bands, with some bidding in the 2100 Mhz band. It was supposed to be subdued this time, especially since the previous auction saw them committing very high amounts,” one official said, speaking on condition of anonymity.
This year’s auction is expected to be limited in scale compared to 2022 when 72,097.85 MHz of radio frequencies were sold for a record ₹1.5 trillion. That year, the government had put up 1,50,173 Mhz of airwaves on sale, including 5G spectrum for the first time.
According to the Department of Telecommunications, bidding was seen in the 900 Mhz, 1800 Mhz and 2100 Mhz bands, while no activity was seen in the other bands including 800 Mhz, 2500 Mhz, 26 Ghz and 3.3 Ghz.
In the 1800 Mhz band, the West Bengal, Bihar, Madhya Pradesh and UP East circles saw bidding above the base price, and revenue from the sale of airwaves in this band is expected to be about 70% of the total bids received. Airtel has upcoming spectrum renewals in six circles of UP East, West Bengal, Bihar, Odisha, Assam and J&K, while Vodafone Idea has spectrum to be renewed in UP West circle in the 900 Mhz band, with bidding over base price in circles of Punjab, Rajasthan, UP East and West Bengal.
A little over 25% of the total bids have come for the 900 Mhz band. In the 2100 Mhz band, about 5 Mhz was bid for, while bidding over base price was observed in Assam, J&K and North East circles.
Industry insiders suggest that since spectrum is being bought for renewals, competitive bidding may be seen in some circles, leading to additional rounds in the auction.
According to the bidding rules, the auction will continue until there is no demand in any slot of spectrum, in any round, in any circle. Analysts expect about 17% of the spectrum value to be sold, which could be the lowest in any auction since 2014.
Reliance Jio, Bharti Airtel and Vodafone Idea had collectively submitted ₹ 4,350 crore as earnest money deposit allowing them to bid for 10-12 times the bid amount. Reliance Jio, India’s largest telecom firm, has deposited ₹ 3,000 crore, while Bharti Airtel and Vodafone Idea deposited ₹ 1,050 crore and ₹ 300 crore, respectively.
It is important to note that Airtel and Vodafone Idea are bound to renew airwaves, while Reliance Jio does not have to renew any spectrum.
