Spectrum auction Day 1: Telecoms place bids worth about ₹11,000 crore in 5 rounds: 6 Key things to know

Telecom operators have placed bids worth ₹11,000 crore on the first day of the spectrum auctions that saw five rounds of bidding, reported PTI quoting anonymous sources.

The Ministry of Communications has put over 10,500 Mhz spectrums worth ₹96,238 crore for auction, said the ministry in a press release.

“Telecom operators have placed bids of around ₹11,000 crore on Day 1. The auction will resume on Wednesday,” said a source familiar with the development to PTI.

As per the data released by the Telecom department, spectrum bands of 900 Mhz and 1800 Mhz received the majority of bids from the companies.

Telecom companies like Bharti Airtel Limited, Vodafone Idea Ltd, and Reliance Jio Infocomm Ltd, were the three to take part in the Day 1 of spectrum auctions, according to the release.

Reliance Jio has deposited ₹3,000 crore, the highest amongst all three bidders as an earnest money deposit (EMD), which provides the strength to bid for maximum radiowaves amongst the three competitors. Bharti Airtel has deposited an EMD of ₹1,050 crore and Vodafone Idea of ₹300 crore for the same.

Here is what you need to know about it:

1. The next phase of the auction will be held on Wednesday, June 26 for the remaining spectrum bands.
2. Spectrum bands like 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz are going for auction, according to the Ministry of Communication.
3. The primary focus of the two telecom giants Bharti Airtel and Reliance Jio has been the 900 Mhz and 1800 Mhz spectrum bands, worth ₹15619.6 crore and ₹21752.4 crore respectively.
4. The spectrums will be assigned to the telecom companies for 20 years after the auction ends, and the lock-in period of a spectrum is a minimum of 10 years, after which it can be surrendered.
5. The winners of the auction will be allowed to pay the amount due in 20 equal installments protecting the Net Present Value (NPV) at an interest rate of 8.65 per cent.
6. The companies will not have to pay any Spectrum Usage Charges (SUC) for the spectrums acquired from this auction, and the winners of the auctions will not have to submit any form of Financial Bank Guarantee (FBG) or a Performance Bank Guarantee (PBG).