Day 1 spectrum auction: Telcos put in bids worth ₹11,301 crore

The Centre has sold spectrum worth ₹11,301 crore on the first day of auction with mobile operators limiting most of their bids at reserve price.

Five rounds of bidding were concluded, with most of the demand for two specific spectrum bands 900MHz and 1800MHz. Demand for spectrum is highest in Bihar and West Bengal. 

Airwaves worth ₹96,000 crore were put on auction on Tuesday. This means that telcos have only placed bids on only 11.7 per cent of the spectrum on offer (by value). The price of the spectrum even after five rounds of bidding is at the reserved price. However, for circles, Bihar and West Bengal prices exceeded the reserve price by a small margin.

Auction to continue

The auction will continue on Wednesday. Analysts are expecting telcos to shell out not more than ₹ 15,000 core for spectrum this time.

While the Department of Telecommunications is hoping to sell 17 per cent of spectrum on offer during these auctions, at the end of day one, only 94.4 MHz spectrum of the total 10,532 spectrum on offer have been sold to operators.  

Demand in the 900MHz band is likely coming from Bharti Airtel and Vodafone Idea who are both bidding to ramp up capacity. Both operators have significantly lower amounts of spectrum in sub-GHz bands in comparison to Reliance Jio – which affects the coverage of their 4G and 5G networks. After its successful follow-on public offer, Vodafone Idea has specific capex targets to improve coverage of its 4G network likely motivating its bidding strategy. 

Market experts also believe that Bharti Airtel could emerge the biggest spender in the 2024 spectrum auction with an outlay of ₹10,400 crore as the telecom major aims to firm up its sub-1GHz holdings and raise its share of 1800-MHz and 2300-MHz bands. It is also facing renewals for 42 MHz of spectrum in six circles of Assam, Bihar, J&K, Orissa, UP East, and West Bengal.

1800 MHz band

According to the expert, Reliance Jio’s bids are likely reserved for the 1800MHz band, to plug its gaps there. The 1800MHz band is also likely inviting bids from Bharti Airtel and Vodafone Idea. With the limited proliferation of 5G services, the procurement of spectrum is largely reserved to improving coverage, an expert said. 

While spectrum bands like 26GHz, 2100MHz, and 3300MHz are for 5G services, so far operators have not show much interest, One slot of 5MHz of spectrum in the 2100MHz band has been picked up in the UP West circle.

The previous spectrum auction in 2022 received bids amounting to Rs 1,50,173 crore, with a total of 71 per cent of the available spectrum was sold as operators were looking to launch 5G services. . 

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