India’s Department of Telecom (DoT) has announced a postponement of the upcoming spectrum auction by 17 days, now scheduled to commence on June 6. This delay follows amendments to the notice inviting applications for bids, providing crucial adjustments aimed at facilitating smoother participation for potential bidders.
The revised timeline, announced on Wednesday, reflects a strategic move by the DoT to allow more time for stakeholders, including major telecom operators, to prepare for the spectrum auction process.
Notably, the decision to push back the spectrum auction follows adjustments to key terms, including reductions in bank guarantees and earnest money deposit requirements, designed to alleviate liquidity concerns for participating entities.
Under the updated schedule, the commencement of the live spectrum auction has been rescheduled to June 6, coinciding with the announcement of Lok Sabha election results, as opposed to the initially proposed date of May 20. Additionally, mock spectrum auctions, vital for familiarizing bidders with the process, are now slated for June 3, replacing the earlier scheduled dates of May 13 and 14.
The spectrum auction, encompassing eight bands for mobile phone services, carries a base price of approximately Rs 96,317 crore. Notable adjustments include a reduction in the number of blocks available for auction in the 900 MHz band in the West Bengal circle, as well as modifications to the validity period of bank guarantees for earnest money deposits, now extended until September 30, 2024.
All spectrum across the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands will be up for auction, with successful bidders granted licenses for a 20-year period. Moreover, bidders will have the flexibility to opt for payments spread over 20 equal annual installments, maintaining the Net Present Value (NPV) at an interest rate of 8.65 percent.
The DoT has also introduced a provision allowing bidders to surrender acquired spectrum after a minimum period of 10 years, offering further flexibility in spectrum management strategies.
Anticipation looms high as major telecom operators, including BSNL, Bharti Airtel, Vodafone Idea, and Reliance Jio, gear up to vie for spectrum licenses, aiming to fortify their network capabilities and expand service offerings. The auction is expected to witness robust participation, with spectrum previously held by companies undergoing insolvency, and set to expire in 2024, also up for grabs.
At the close of 2023, Reliance Jio led the market with a 39.69 percent share, followed by Bharti Airtel (32.95 percent), Vodafone Idea (19.25 percent), and BSNL (7.94 percent). With the total base price set at Rs 96,317.65 crore, the spectrum auction promises to reshape the telecom landscape, ushering in new opportunities and advancements in mobile communication technologies.
