[ad_1]
The telecom spectrum auctions concluded on Tuesday after a day and a half of bidding, with the Centre garnering ₹77,814.80 crore in revenues. The amount exceeded the expectations of the government as well as analysts, as telcos focussed on renewing expiring spectrum and consolidating holdings in select bands.
Mukesh Ambani-led Reliance Jio was the biggest bidder acquiring 488.35 MHz of spectrum for ₹57,122.65 crore, followed by Bharti Airtel which bid for 355.45 MHz of spectrum for ₹18,698.75 crore, while Vodafone Idea bid for only 11.80 MHz of airwaves for ₹1,993.40 crore. The spectrum will be assigned to bidders for a period of 20 years.
In the auction — first in nearly five years, and among the shortest one with participation from only three players — a total of 2308.80 MHz of spectrum across seven bands worth about ₹3.92 lakh crore was put up for sale. Of this, bids were received for 855.60 MHz or 37% of the spectrum.
At the end of a total of six rounds of bidding, no bids were received for the premium 700 MHz band as well as the 2500 MHz band. The 700 MHz band remained unsold during the previous 2016 auctions as well due to the high prices.
The government expects to receive an upfront payment of about ₹26,000-27,000 crore, of which ₹19,000-20,000 crore will come in during the current fiscal (before March 31, 2021), while the remaining payment will be received by December 2021.
“Our estimate itself was ₹45,000-50,000 crore and we have got bids worth ₹77,814.80 crore, which is much higher than expectations,” Telecom Secretary Anshu Prakash told reporters, noting that the spectrum auction took place in the backdrop of the pandemic and stress in the sector.
“…when we go for an auction, we put all available airwaves, but we know the bidder can’t buy everything, they buy only as per their needs,” he said.
Replying to a query, the Secretary said the bidding took place largely at reserve price. “…Whether bidding exceeds the reserve price or not depends on competition. There were only three bidders… So, what each bidder seems to have done is consolidate position in each of their respective bands. Also, 5G auction will also happen. So I am not very certain if telcos would have wanted to put all their resources in this auction”
In a press statement, Reliance Jio said it acquired spectrum in all 22 telecom circles, across 800 MHz, 1800 MHz and 2300 MHz bands, and its owned spectrum footprint has increased by 55% to 1,717 MHz. Mr. Ambani, Chairman, Reliance Industries, said, “With our increased spectrum footprint, we are ready to further expand the digital footprint in India as well as get ourselves ready for the imminent 5G rollout.”
Bharti Airtel, which bid for spectrum across all bands barring 700 MHz and 2500 MHz, said the spectrum acquired during the auction gives the company “the most formidable spectrum holdings in the country”. It added that it has secured a pan-India footprint of the sub-GHz spectrum that will help improve its deep indoor and in building coverage in every urban town. “All of the spectrum will enable Airtel to deliver 5G services in future,” it said.
The Sunil Bharti Mittal-led firm also pointed out that the 700 MHz band bands did not get any bid from the operators as it made no economic case for them based on the high reserve prices. “The 700 MHz band coupled with the 3.5 GHz band has the potential to accelerate India’s progress to the top league of digitally enabled nations. Therefore, the reserve pricing of these bands must be addressed on priority in future,” it said.
Meanwhile, Vodafone Idea, which bid for small quantities in the 900 MHz and 1800 MHz band, said that the company had entered this auction holding the largest quantum of spectrum with a very small fraction coming up for renewal. “We have used this opportunity to optimize spectrum holding post-merger to create further efficiencies in few circles,” it said.
Giving details of the auction, the Secretary said of the total amount put up for auction in various bands, 65.22% was sold in 800 MHz, 38.87% was sold in 900 MHz, 42.87% in 1800 MHz, 8.57% in 2100 MHz and 89.29% in 2300 MHz. However, in terms of contribution to the total government revenues from auction, 800 MHz contributed 48%, followed by 1800 MHz (24%), 2300 MHz (17%) and 900 MHz (10%).
Ankit Jain, Assistant Vice-President, ICRA, said the spectrum auction results have exceeded ICRA’s earlier estimates.
“The telcos not only bid for renewals of the expiring spectrum but focused on consolidating their spectrum holdings in the 800 MHz, 900 Mhz and 2300 MHz bands. While the sub-GHz bands will be crucial for 5G technology deployment going forward as well as improvement of indoor coverage, the appetite for 2300 MHz band stems from the rising mobile broadband usage and thus the need for improving network capacity.”
Mr. Jain added that while the value of total spectrum sold is only 19% of the total value of spectrum on offer, post the auctions, the debt levels of the industry would increase to around ₹5 lakh crore as on March 31, 2022.
Majority of payout by Reliance Jio will be for the spectrum in 800 MHz band (₹34,491 crore), followed by ₹12,461 crore for 1800 MHz band and ₹10,170 crore for 2300 MHz. For Bharti Airtel, the highest payout of ₹6,448 crore is for spectrum in 900 MHz band, followed by ₹5,816 crore for 1800 MHz, ₹3,070 crore for 2300 MHz, ₹3,008 crore for 800 MHz and ₹355 crore for 2100 MHz.
[ad_2]
Source link
