Round 1 of 5G auctions: Bid amount at Rs 1.45 trillion

Highest so far, the amount didn’t exceed reserve price in any of the bands.

Round 1 of 5G auctions: Bid amount at Rs 1.45 trillion
The maximum interest has been shown by the operators in buying 3,500 MHz band, which is a 5G band where a total commitment of Rs 78,550 crore has been made. (IE)

Telecom operators committed a total of Rs 1.45 trillion for spectrum in 5G and other bands on the first day of auctions. However, the amount did not exceed the reserve price in any of the bands. Telecom minister Ashwini Vaishnaw said that the first-day proceeds surpassed the government’s internal estimates. He also said that the amount garnered is the highest so far, crossing the Rs 1.09 trillion received in the 2015 auctions.

However, the total quantum of spectrum put up for auctions in 2015 at reserve price was valued at Rs 80,000 crore. So, the return for the government was higher as it exceeded the base price. In comparison, currently, the total value of spectrum on sale is Rs 4.3 trillion and going by the bidding activity, which was at 90%, the maximum jump in value on Wednesday would be around 10%. So, not only all the sale will be at reserve price but a large quantum of spectrum will also remain unsold.

Going by the first-day sale, of the total 72 GHz spectrum available, operators have committed to buy 48.3 GHz.

More than 60% of the spectrum remained unsold in the 2016 and March 2021 auctions as operators found reserve price to be too high.

Vaishnaw described the participation of four bidders – Reliance Jio, Bharti Airtel, Vodafone Idea and Adani Data Networks – as “strong”.

He said that the healthy participation by the operators show that there is a turnaround in the industry from its difficult times.

The government, he said, will allocate the spectrum in record time and 5G services are expected to start rolling out by September.

The target is to allocate the spectrum by August 14, he said.

The maximum interest has been shown by the operators in buying 3,500 MHz band, which is a 5G band where a total commitment of Rs 78,550 crore has been made. The millimetre band, also a 5G band in 2,600 MHz, also saw high bidding with a total commitment of Rs 14,215 crore.

The real surprise was the premium 700 MHz where despite the high reserve price, a commitment of Rs 39,270 crore has been made. Though the name of the operators is not disclosed at this stage by the government, going by the earnest money deposit, it is expected that only Reliance Jio has committed to buy spectrum in this band.

The sale of 700 MHz band is interesting because it remained unsold in the previous two auctions due to its high reserve price.

Two bands – 600 MHz and 2,300 MHz – saw zero bids.

Spectrum in the bands 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz and 2,500 MHz also saw bidding as operators will be looking to fill gaps in their existing portfolio.

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