India postpones spectrum auction yet againIndia postpones spectrum auction yet again

India has postponed its 5G spectrum auction yet again. Originally scheduled to be held on May 20, it was delayed to June 6, and now the Department of Telecommunications (DoT) has postponed it again to June 25.

The DoT has amended the Notice Inviting Applications (NIA), with mock auctions' dates revised to June 13 and June 14 and the genuine auction on June 25.  

The first time the spectrum auction was delayed, it was because it would have taken place during the general election, which started on April 19 and concluded on June 1. While the DoT has not given any reason for the recent change, it is believed that the auctions have been postponed because the ruling party has fallen short of the majority and it will take some time for the new government to take charge.

The three private service providers – Reliance Jio, Bharti Airtel, and Vodafone Idea – have already submitted their Earnest Money Deposit (EMD) for the auction. Jio's EMD amounts to INR30 billion ($359 million), while Airtel and Vodafone Idea have deposited INR10.5 billion ($125.8 million) and INR3 billion ($36 million), respectively. A participant can bid for a maximum of 12 times the EMD.

While Jio has deposited the highest EMD, it is unlikely to spend as much since it doesn’t have any renewal coming up. In addition, it acquired pan-India spectrum in the 700MHz and 26GHz bands in the last auction.

On the other hand, both Airtel and Vodafone Idea have to acquire spectrum in six and two circles (service areas), respectively, to renew their holdings. Airtel needs to renew spectrum in Orissa, UP East, Jammu and Kashmir, Bihar, Assam and West Bengal, and Vodafone Idea has to renew in the circles of West Bengal and UP West. Airtel is also likely to acquire spectrum in the 800MHz and 900MHz bands to transition from 5G Non Standalone (5G NSA) to 5G Standalone (5G SA).

All of the telcos' EMDs add up to INR43.5 billion ($521 million) in total, meaning they can collectively bid for INR522 billion ($6.2 billion) worth of spectrum, which is much less than the government's base price of INR963.1 billion ($11.3 billion). Spectrum in the 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300MHz and 26GHz bands will be up for sale in the auction. 

A key reason for the anticipated low-key auction is that the telcos already have enough spectrum, and 5G monetization has yet to start. As of now, the Indian telcos are offering 5G at 4G tariffs. While Jio and Airtel started offering 5G services in October 2022, Vodafone Idea plans to start offering 5G services later this year.