India’s Department of Telecommunications (DoT) has disclosed that the much-anticipated spectrum auction is set to kick off on May 20, marking a pivotal moment in the country’s telecommunications business.
The auction, slated to encompass all available spectrum across various bands including 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz, is expected to draw significant interest from major telecom operators. Notably, spectrum held by companies undergoing insolvency and expiring in 2024 will also be up for grabs.
Telecom giants such as BSNL, Bharti Airtel, Vodafone Idea, and Reliance Jio are poised to capitalize on the auction, eyeing opportunities to bolster their network capabilities and service offerings.
Reliance Jio (39.69 percent market share), Bharti Airtel (32.95 percent), Vodafone Idea (19.25 percent) and BSNL (7.94 percent) are the leading telecom operators in India at the end of 2023.
With a total base price set at Rs 96,317.65 crore, the auction will allocate spectrum licenses for a period of twenty years. Successful bidders will have the option to spread their payments over 20 equal annual installments, ensuring the Net Present Value (NPV) remains intact at an interest rate of 8.65 percent.
Employing a Simultaneous Multiple Round Ascending (SMRA) e-auction format, the auction promises a transparent and competitive bidding process, fostering fair market dynamics, DoT website said.
Furthermore, spectrum acquired through this auction will grant operators the flexibility to surrender it after a minimum tenure of ten years, offering a degree of operational agility.
In a significant boon to bidders, there will be no Spectrum Usage Charges (SUC) imposed on spectrum acquired in this auction, alleviating financial burdens and enhancing investment prospects.
Importantly, successful bidders will not be required to furnish Financial Bank Guarantees (FBG) or Performance Bank Guarantees (PBG), streamlining the participation process and reducing administrative complexities.
The upcoming spectrum auction holds immense significance for India’s telecom sector, poised to unleash a new wave of innovation and connectivity across the nation. India has 1,158.49 million mobile phone customers at the end of December 2023, according to the latest data from TRAI.
Baburajan Kizhakedath
