DoT will be holding an auction for 4G spectrum from March 1, where we expect to see Reliance Jio, Bharti Airtel, Vi and BSNL place their bids.
The Department of Telecommunications (DoT) has finally announced the auction dates for the 4G airwaves spectrum in India worth Rs 3.92 lakh crore at base price. The spectrums being offered during the auctions include the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands
According to the notice, the last date for the online submission of the applications to participate in the auction is February 5, with the auctions commencing from March 1. All of the auctions will be held online this time along, due to the ongoing Covid-19 pandemic. The final list of winners will be declared on February 24.
“We welcome the government’s decision to kick start the Spectrum Auction from March 1st. This will enable the industry to cater to the exponential increase in data usage which will facilitate in supporting the Digital India vision. While the Govt. has addressed the requirement for [the] availability of more spectrum, lowering the reserve prices would have provided additional resources for network expansion to the Telcos. High reserve prices in past auctions have resulted in large amounts of spectrum remaining unsold. We hope the Govt. will take additional measures to boost the financial health of the industry, which is the backbone of a digitally connected India,” said Lt. Gen. Dr. SP Kochhar, DG, COAI.
The upcoming sale will help Reliance Jio renew a major part of its expiring spectrum permits and simultaneously offer Bharti Airtel and Vi an opportunity to strengthen their bandwidth holdings as data usage shoots up.
Talk about perfect timing
The auction comes at a time when data usage in the country has been surging all thanks to a majority of the people working out of their homes and people turning to OTTs and online content as a source of entertainment. Analysts predict the sale to generate anywhere between Rs 40,000 to Rs 50,000 crore, with Jio being the only profit-making carrier and the primary buyer in the auction.
It is expected that Airtel, Vi will also be pitching in for some of the airwaves, if any.
Successful bidders will have to pay up to three percent of the Adjusted Gross Revenue (AGR), excluding wireline services, as spectrum usage charges for the spectrum won through this auction. They may pay the entire bid in one go or pay 25 percent for the 700 MHz, 800 MHz, 900 MHz bands, or 50 percent for 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands, upfront and the rest in up to 16 equated annual instalments after a moratorium of two years.
Telcos also vying for 5G in India
All major telecom service providers like Reliance Jio, Bharti Airtel, Vi and more are expected to place their bids for different spectrum bands during the auction.
To recall, Reliance Industries Chairman and Managing Director Mukesh Ambani, announced during India Mobile Congress 2020, that Jio will roll out its 5G services in India in the second half of 2021.
Reliance Jio has partnered with Qualcomm to build its 5G infrastructure in India. Whereas, Airtel and Vi have named Nokia and Ericsson for their trails. Jio initially had also named Samsung, Nokia and Ericsson for trial. Vi had also named US-based Mavenir as an option for trials.
BSNL, on the other hand, has partnered with state-run Centre for Development of Telematics (C-DoT) for setting up its 5G infrastructure.
