5G Spectrum auction Day 1: Govt receives bids worth Rs 11,000 crore

Telecom operators on Tuesday placed bids for spectrum worth Rs 11,000 crore on the first day of the 5G spectrum auction, sources at the Department of Communication (DoT) said. While auctions will continue on Wednesday, the activity level has reached 90 per cent, they added.

Five rounds of bidding saw operators focusing mostly on five of the eight bands on offer — 800 megahertz (MHz), 900 MHz, 1,800 MHz, 2,100 MHz, and 2,500 MHz — data released by the DoT showed. Interest in the 800 MHz band is expected to have been sought by Bharti Airtel and Vodafone Idea, people in the know said.

The government is auctioning 10,523.15 MHz of spectrum, covering a large chunk of voice and data spectrum, at a reserve price of Rs 96,317.65 crore.

All unsold spectrums from the previous sale are up for bidding, including the 2300 MHz, 3300 MHz, and 26 GHz bands. Interestingly, the first day did not see any demand for 3300 MHz and 26 gigahertz (GHz) bands, which are considered to be ideal for 5G signals.

Reliance Jio is believed to have given the 800 MHz band a miss given that this band has been mostly unsold since 2022.

Overall, the quantum of spectrum on offer has shrunk by more than seven times since 2022. With telecom operators depositing the lowest earnest money deposit (EMD) in the last six auction rounds and companies announcing that they will mostly focus on spectrum renewals, analysts had said the auctions would be a muted affair.

The three private sector telecom operators — Reliance Jio, Bharti Airtel, and Vodafone Idea — have collectively put up Rs 4,350 crore as EMD for the bidding, the pre-qualified bidder details released by DoT has shown. This is five times smaller than the last 5G spectrum auctions in 2022, data shows.

Companies get points based on the EMD amount they have deposited, which enables them to bid for the number of circles and quantity of spectrum they want. Higher points signify higher capability to place bids. Telcos can bid for spectrum worth up to 12 times their EMD.

Expected to spend about Rs 3,800 crore at the reserve prices notified by the government, Bharti Airtel is widely tipped to become the biggest spender, according to the analyst notes released by Jefferies and Axis Capital earlier this month.