India set for Rs96,317.65 cr spectrum auction on Tuesday

India is set to commence its spectrum auction on Tuesday offering airwaves valued at Rs96,317.65 crore. The auction will see major private sector telecom operators, including Reliance Jio, Bharti Airtel Ltd and Vodafone Idea Ltd vying for the available frequencies.

Key players and expected expenditure

According to a Mint report, the three telecom giants, collectively serving nearly a billion mobile subscribers, are projected to spend approximately Rs15,000 crore on acquiring spectrum across 4G and 5G bands. This estimate is based on reports from various brokerage firms. The auction, conducted by the Department of Telecommunications (DoT), will feature radio frequencies in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz and 26 GHz bands.

Market expectations and industry analysis

Despite the high valuation of the airwaves, the upcoming auction is anticipated to be relatively subdued, a report in the Economic Times said. Analysts attribute this to the sufficient 5G spectrum holdings already possessed by Reliance Jio, Bharti Airtel and Vodafone Idea, coupled with the current low adoption rate of 5G technology due to the lack of widespread consumer-centric applications.

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Strategic moves by telecom operators

Bharti Airtel and Vodafone Idea are expected to focus primarily on renewing their existing spectrum holdings in specific bands with only minimal additional purchases. On the other hand, Reliance Jio, which does not have any immediate renewal requirements, may look to enhance its spectrum portfolio by acquiring additional frequencies in the 1800 MHz band.

While the total investment is predicted to be modest compared to the total value of the spectrum on offer, the outcomes of this auction will play a crucial role in shaping the future landscape of India’s telecom sector, particularly in the context of 4G and emerging 5G services.

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Spectrum auction process in India

In India, the auctioning of spectrum is a carefully structured process managed jointly by the Department of Telecommunications (DoT) and the Telecom Regulatory Authority of India (TRAI). It begins with TRAI assessing market demand and recommending reserve prices and auction rules. Stakeholder consultations follow, involving telecom operators and other interested parties to refine auction parameters. The DoT then designs the auction framework, specifying spectrum quantity, frequency bands and auction formats such as ascending clock or simultaneous multiple-round auctions.

Eligible operators submit applications, which are scrutinised for financial stability and regulatory compliance. The auction proceeds in rounds where participants bid competitively, starting from reserve prices set by the DoT. Successful bidders must promptly pay the winning bid amounts and comply with regulatory obligations post-auction including spectrum usage conditions and quality standards.

Disclaimer: Firstpost is part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary. Reliance Jio is owned by Reliance Industries Ltd.