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Government to auction 5G spectrum today: All you need to know

The government is conducting the 10th spectrum auction today. Various telecom operators including Jio and Airtel will bid to get the desired spectrum. Here’s how companies are expected to bid.

Written By: Om Gupta New Delhi Published on: June 25, 2024 11:41 IST
5G network
Image Source : FILE 5G network

The government has started the auction of telecom spectrum worth Rs 96,238.45 crore. The spectrum being auctioned totals 10,522.35 MHz in various bands and is valued at Rs 96,238.45 crore at reserve prices, according to the Ministry of Communications.

The upcoming auction will include the following spectrum bands for bidding: 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz. The auction will commence at 10AM and will involve three bidders: Bharti Airtel, Vodafone Idea, and Reliance Jio Infocomm.

What are Airtel and Jio likely to bid for? 

The 3300 MHz band is likely to attract the interest of Reliance Jio and Bharti Airtel as it is one of the key bands for providing 5G services with low capital expenditure. Airtel and Vodafone Idea are expected to only renew their holdings in specific bands or acquire minimal additional airwaves, according to analysts.

“To augment existing telecom services and maintain continuity of services, the government will hold the spectrum auction on Tuesday,” said the ministry.

Analysts speculate that Jio, as the market leader, might aggressively bid for spectrum, especially in regions where competitors need to renew their licenses to maintain uninterrupted services. This could potentially lead to competitive bidding scenarios.

The 1800 MHz spectrum band has been allocated Rs 21752.4 crore at reserve price, followed by the 800 MHz band at Rs 21,341.25 crore.

“This is in line with the government's commitment to facilitate affordable, state-of-art high-quality telecom services to all the citizens,” the ministry added.

DoT began the spectrum process on March 8. The assigned spectrum will be valid for 20 years. Successful bidders can pay in 20 equal annual installments, ensuring the NPV at an interest rate of 8.65 per cent.

Spectrum acquired in this auction can be surrendered after at least 10 years. Spectrum Usage Charges (SUC) will not apply to spectrum acquired in this auction, according to the ministry.

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