5G spectrum bidding spills over to Day 3 for select circles

After 9 rounds of bidding, govt kitty from spectrum sale touches Rs 1.49 trillion

Telecom companies continued bidding for spectrum on the second day of 5G auction, spilling the action over to Thursday. At the end of nine rounds of bidding, telcos have bought airwaves worth Rs 149,454 crore (Rs 1.49 trillion). The purchase on day two was incremental at Rs 4,454 crore, after a record sale of spectrum worth over Rs 1.45 trillion on the opening day of the biggest auction so far in India.  

Sources pointed out that the bidding was prolonged due to intense competition among telcos in 1800 MHz band for the UP (East) circle. The demand in this circle is for an estimated 71 blocks against a supply of 54 blocks, pushing the bidding beyond the base price.   

While the 5G auction is still on, the total figure of Rs 149,454 crore garnered so far is the highest revenue that the government has been able to rustle up from any of the seven previous auctions held since 2010. The highest was in 2015 when the government made over Rs 113,932 crore.  

In the 1800 MHz band, the total value of spectrum won has risen from Rs 6,529 crore on day one to Rs 9,778 crore on the second day. Besides UP East, new demand has come from  Maharasthra and Odisha, amongst others. In the 5G band of 3.5 GHz, there has been renewed demand in Himachal Pradesh, Rajasthan, Kerala, Madhya Pradesh and UP West. As a result, the total value of spectrum won has gone up from Rs 78,550 crore on the first day to Rs 80,590 crore on the second day in this band. There was a minor demand in the millimetre band from once circle. However, there were hardly any takers in the 800 MHz band (except in four circles) and in 900 MHz (except in three circles).       

Communications minister Ashwini Vaishnaw told reporters that the spectrum sold was much higher than expectations and that the auctions would continue on Thursday. This time he was not ready to hazard a guess as to when it would end.

Government estimates had suggested spectrum sales of around Rs 110,000 crore. Officials said they had not expected spectrum in 700 MHz to be sold this time also, like the previous two instances. On day one, 10 Mhz of 700 band spectrum was sold for over Rs 39,260 crore, pushing up the numbers. 

“The auctions reflect that we have been able to generate confidence in the industry and also that most of the legacy issues have been resolved. The good thing is that with the large availability of spectrum which came for auction, the service quality problems will surely improve,” said Vaishnaw at a press conference.

Vaishnaw said the 700 band, which could not be sold in the last two auctions and now has, would be useful for deployment of 5G in far flung rural areas because of the large coverage that it provides. He added that in many geographies, the bidding, which started  low, had picked up and telcos had shown interest across various bands.

With the country ready with its own end-to-end indigenous stack--from radio to the core for both 4G and 5G—the minister is expecting  interest from telcos to go for the technology in their network roll-out.  

At the end of the second day, telcos have collectively spent 76.25 per cent of their war chest (Rs 196,000 crore) based on their earnest money deposited to the government. One can expect more action in the legacy bands (800-2500 MHz) primarily for telcos to increase their footprint in some areas and to renew spectrum, some of which comes for renewal in 2024. However, only 34 per cent of the Rs 430,000 crore (Rs 4.3 trillion) of spectrum, put up for auction, has been sold.