Telcos Likely To Buy Spectrum Worth Rs 71,000 Crore In Upcoming 5G Auction: IIFL Report
Mobile TowersThe three private telecom operators — Reliance Jio, Bharti Airtel and Vodafone Idea — are expected to buy spectrum worth Rs 71,000 crore in the upcoming auction, leaving a vast majority of the radiowaves going under the hammer unsold, according to research firm IIFL Securities.
The government will next month auction about Rs 4.3 lakh crore worth of airwaves capable of offering fifth-generation or 5G telecom services, including ultra-high-speed internet.
According to the report released on Wednesday, the government's in-principle nod to allocate spectrum directly to enterprises is going to have an adverse outcome of the mega auction.
"While supply is abundant, the government has not cut TRAI's proposed reserve prices despite telcos' assertion that these were still high. We see telcos bidding only for 4 of the 10 bands and spectrum should be sold at base price. We estimate spectrum outlay of Rs 37500 crore, Rs 25000 crore and Rs 8500 crore for Jio, Bharti and Vi," IIFL said.
The research firm further said if all telecom operators avail the option of equal annual installments over 20 years, the government would receive Rs 6,200 crore proceeds in the current financial year.
It said telcos may give the premium 700 MHz band spectrum a miss as they await further reserve-price cuts. Jio and Bharti may bolster their sub-1 GHz holdings by bidding for the 850 MHz and 900 MHz bands, respectively.
"We do not assume any bids in the 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands. Bids for 3.6 GHz are somewhat tricky to predict," it said.
The report further said telcos could bid for small quantities in the 3.6 GHz and 28 GHz band — seen as the prime radiowaves for 5G technology — as it can lead to large savings in spectrum usage charges.
The Department of Telecom (DoT) has issued a new order that will enable telecom operators to reduce spectrum usage charges proportionately on buying fresh radiowaves in the upcoming 5G auction.
(This story has been published from a wire agency feed without any modifications to the text. Only the headline has been changed.)
An Appeal...
Dear Reader,
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.
