Second Round Of 5G Spectrum Auction For Bands Worth Over Rs 96,000 Crore: Here's What Key Telecom Players Are Doing

India's private telecom players Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) commenced bidding as the country’s second 5G spectrum auction began today (25 June), according to The Economic Times reports.

"To augment existing telecom services and maintain continuity of services, the government will hold the spectrum auction on Tuesday, 25 June 2024. This is in line with government’s commitment to facilitate affordable, state-of-art high quality telecom services to all the citizens,” the government stated.

The auction features three bidders: Bharti Airtel Limited, Vodafone Idea Ltd, and Reliance Jio Infocomm Ltd.

This time, 5G spectrum in eight bands — 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3.3 GHz, and 26 GHz — worth approximately Rs 96,238.45 crore at reserve prices is available.

Unlike the last 5G auction in July 2022, the 600 MHz and 700 MHz sub-GHz spectrum are not on offer this time.

Shares of Airtel rose by 0.4 per cent to Rs 1,424.80 in morning trade, while Vi’s shares remained flat at Rs 17.26 on the BSE Tuesday. Reliance Industries, the parent company of telecom market leader Reliance Jio, saw its stock increase by 0.3 per cent to Rs 2890.85.

Spectrum will be assigned for 20 years, with successful bidders allowed to make payments in 20 equal annual instalments, maintaining the net present value at an interest rate of 8.65 per cent.

Acquired spectrum can be surrendered after a minimum of 10 years, and there will be no spectrum usage charges for spectrum acquired in this auction.

Analysts anticipate a subdued auction as Airtel and Vi are likely to target specific bands (900 MHz, 1800 MHz) in regions where they need spectrum renewals.

Some industry experts suggest Jio might largely abstain, as it does not face imminent airwave renewals, though others believe Jio might increase its holdings in the 800 MHz and 1800 MHz bands in certain areas.

The expectation of muted bidding is reflected in the modest earnest money deposits (EMDs) submitted by the three telcos, ranging from Rs 300-3,000 crore, the lowest since the 2014 auction and 79-86 per cent lower than the previous 5G auction in 2022.

For this 5G auction, Jio, Airtel, and Vi submitted EMDs of Rs 3,000 crore, Rs 1,050 crore, and Rs 300 crore, respectively, significantly below the Rs 14,000 crore, Rs 5,500 crore, and Rs 2,200 crore submitted by Jio, Airtel, and Vi in the 2022 auction.