The first day of the biggest telecom auction in the country ended with top telcos buying spectrum worth over Rs 1.45 trillion in frequency bands, including 5G. Telecom companies also bought the much-acclaimed and expensive 700-MHz spectrum.
The bids mainly were pegged at the base price. Reliance Jio, Bharti Airtel, Vodafone Idea and Adani Group are in the race to get 5G spectrum, allowing them to offer broadband speeds up to ten times faster than 4G. Communications Minister Ashwini Vaishnav called the bid “active” and the participation “strong”. He told reporters that spectrum worth over Rs 1.45 lakh crore was bought on the first day of the auction, exceeding all expectations.
The spectrum won provisionally on the first day accounts for 73 per cent of the war chest of the telecom firms at Rs 1.96 trillion, based on their earnest money deposited with the government.
There were four rounds of bidding on Tuesday. Most telecom firms expect the auction to conclude on Wednesday.
The surprise was that one telecom operator, which analysts say is likely to be Reliance Jio (based on its earnest money deposit and war chest), provisionally won 10 MHz in the 700-MHz band across the country in 22 circles. For this, it has to pay Rs 39,270 crore.
The 700-MHz band spectrum, considered globally as crucial for coverage with other bands for 5G, would give the company an edge over its rivals, say analysts.
The band had remained unsold in the last two auctions owing to the high base price, which was reduced by 40 per cent this time.
The 5G bands — the 3.5 GHz and the millimetre band — also got buyers, but there is still enough spectrum available. Telecom players have won spectrum in this band valued at Rs 78,550 crore, again at the base price, which is 75 per cent of the value of the range sold — which is at Rs 1.04 trillion.
In the millimetre band, where 2,850 MHz was on offer in every circle again, telcos have paid around Rs 14,632 crore, which is around 73 per cent of what the government would have got if the entire spectrum on offer was sold (Rs 19,950 crore).
The auction was focused on the 5G spectrum because there were no takers in the 600-MHz, 800-MHz, 900-MHz (except in J&K and Assam) and 2,300-MHz bands. In the 1800-MHz band, there was participation in seven circles, 2100-MHz in two circles, and 2500-MHz in one circle.
Analysts say Jio and Bharti look like having bid for 100-MHz in the 3.5 GHz band and Vodafone Idea 50-MHz in all circles except in C circles like Assam, Jammu and Kashmir, the Northeast, and Odisha.
There is an unsold spectrum across bands in all circles, so it is fair to assume that the auction will only end at the base price.
The government auctioned 72 GHz of the spectrum with a base price of Rs 4.3 trillion, which means a substantial portion of the range will remain unsold. But the numbers, thanks to the unexpected buying in the 700-MHz band, have changed the game and are far more than government officials expected.