Spectrum auction off to slow start; receives bids for ₹11,000 cr on Day One

New Delhi: The first spectrum sale in two years got off to a slow start on Tuesday, with telecom operators bidding for ₹11,000 crore against nearly ₹96,320 crore worth of airwaves on offer.

Telecom operators bid for 150 Mhz of spectrum, against the 10,523.2 Mhz that the government has put up for sale, two officials familiar with the matter said. Bidding is expected to continue in the 900 Mhz and 1800 Mhz bands on Wednesday, which saw the maximum interest on day one, they added.

“On the first day, ₹11,000 crore has been committed, bids for 150 Mhz have been received in five rounds.Most activity has been seen in the 900 Mhz and 1800 Mhz bands, with some bidding in the 2100 Mhz band. It was supposed to be subdued this time, especially since the previous auction saw them committing very high amounts,” one of the two officials cited above said on condition of anonymity.

Also read: India to hold auction for spectrum worth ₹96,318 crore on Tuesday

This year's auction is expected to be limited in scale compared to the levels of 2022, when 72,097.85 MHz of radio frequencies were sold for a record ₹1.5 trillion. That year, the government had put up 1,50,173 Mhz of airwaves on sale, including 5G spectrum for the first time, which led to record bidding.

While revenue from spectrum sale was not separately stated in the interim budget, overall revenue from telecom sector is estimated at ₹1.2 trillion for FY25.

According to data issued by the department of telecommunications on Tuesday, bidding was seen in the 900 Mhz, 1800 Mhz and 2100 Mhz bands, while no activity was seen in the other bands including 800 Mhz, 2500 Mhz, 26 Ghz and 3.3 Ghz.

Also read: Jio, Airtel and Vi deposit ₹4,350 crore for spectrum auction

In the 1800 Mhz band, the West Bengal, Bihar, Madhya Pradesh and UP East circles saw bidding above the base price, and revenue from the sale of airwaves in this band is expected to be about 70% of the total bids received. Airtel has upcoming spectrum renewals in six circles of UP East, West Bengal, Bihar, Odisha, Assam and J&K, while Vodafone Idea has spectrum to be renewed in UP West circle in the 900 Mhz band, with bidding over base price in circles of Punjab, Rajasthan, UP East and West Bengal. A little over 25% of the total bids have come for the 900 Mhz band. In the 2100 Mhz band, about 5 Mhz was bid for, while bidding over base price was observed in Assam, J&K and North East circles, an analysis of DoT data showed.

Competitive bidding likely

Industry insiders said that since spectrum is being bought for renewals, competitive bidding may be seen in some of the circles which was leading to additional rounds in the auction. According to the bidding rules, auction will continue till the time there is no demand in any slot of spectrum, in any round, in any circle. Analysts expect about 17% of the spectrum value to be sold, which could be the lowest in any auction since 2014.

Also read: Government’s SC plea: No change to the 2012 satellite broadband spectrum auction judgement’

Reliance Jio, Bharti Airtel and Vodafone Idea had collectively submitted ₹4,350 crore as earnest money deposit allowing them to bid for 10-12 times the bid amount. Reliance Jio, India’s largest telecom firm, has deposited ₹3,000 crore, while Bharti Airtel and Vodafone Idea deposited ₹1,050 crore and ₹300 crore, respectively. To be sure, Airtel and Vodafone Idea are bound to renew airwaves, Reliance Jio does not have to renew any spectrum.