A spectrum auction will begin on May 20 for eight bands: DoT announcement

According to a letter requesting applications for the next spectrum auction, the Department of Telecom has stated that it would start on May 20. The government will put eight spectrum bands up for auction for mobile phone services, with a starting bid of Rs 96,317.65 crore, or $11.6 billion.

The spectrum owned by certain corporations that are going through bankruptcy procedures as well as frequencies that are scheduled to expire this year will be up for auction.

While allowing telecommunications companies to get interim allocations, the Union Cabinet approved these auctions in February of this year. There will be an auction for all of the available spectrum in the 26 GHz, 800, 900, 1800, 2100, 2300, 2500, and 3300 MHz bands.

The 10 GHz of radiowaves that will be auctioned off in the near future are significantly less than in the past because telecom companies acquired enough bandwidth at the last auction to cover the majority of their needs.

Companies can apply until April 22 if they want to purchase spectrum. The real sale will start on May 20, but there will be a practice auction on May 13 and 14.

However, industry analysts and experts anticipate a discrete transaction because India’s leading telecom companies don’t now require additional spectrum for their 5G requirements. Given that they need to renew their airwaves in a few circles, Bharti Airtel and Vodafone Idea are probably going to make some selective purchases in the auction. In addition, analysts noted that the Adani group might purchase certain airwaves in lower spectrum bands.

The whole spectrum of 10,523.8 MHz will be up for sale. Appropriate indexation would be used to determine the reserve price, according to Union Minister Anurag Thakur.

“Existing telecom service providers can continue use of spectrum by paying auction-determined prices during the interim period to prevent disruption in telecom services,” Thakur stated.

The Mukesh Ambani-led Reliance Jio, Bharti Airtel, and financially struggling carrier Vodafone Idea are all expected to benefit from the impending auctions. Having invested more over $11 billion in airwaves, Jio emerged as the leading bid in the telecom spectrum auction of 2022. Through the sale, the central government raised $19 billion for its coffers that year.

According to analysts, the intense competition in the telecom sector is negatively impacting company margins and could have an effect on the amount of money they bid for more airwaves.

In J&K, Odisha, Bihar, UP (East), West Bengal, and Assam, Airtel must renew its airwaves. In response, Vodafone Idea must update its licenses in UP West and West Bengal.

According to Jefferies, market leader Reliance Jio does not have any spectrum renewals scheduled for this year, while Airtel and Vodafone Idea only need to renew airwaves valued at about Rs 4,200 crore and Rs 1,950 crore, respectively.

The telecom spectrum owned by Bharti Airtel in five circles expired on February 9 and another is scheduled to expire in March. Vodafone Idea’s spectrum in UP West and West Bengal also ran out, therefore the business had to ask for permission to keep using it. In order to increase passenger safety, the Cabinet also approved the reallocation and increased allocation of spectrum for the transportation sector.