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India to hold 4G spectrum auction in March 2021

India will sell 2251.25MHz of spectrum for use with 4G services in March 2021 during a government auction that values frequencies at a huge INR3.92 trillion (US$53.2 billion).

"The auction will be for spectrum in 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz frequency bands," said a press release issued by the government. "Spectrum will be offered for assignment for a validity period of 20 years."

Authorities are to publish Notice Inviting Applications (NIAs) that will include details of all auction rules later this month.

This would be India's first auction since consolidation left the market with just three big telcos – Reliance Jio, Bharti Airtel and Vodafone Idea – that are expected to dominate proceedings.

It would allow Jio to renew spectrum that is due to expire soon, while Airtel and Vodafone Idea may use it to expand their network coverage.

Jio's 800MHz license is set to end in several circles in July next year, more or less guaranteeing Jio will be a major participant in the auction.

But the sale is unlikely to witness aggressive bidding since other telcos have no pressing need for spectrum.

Airtel and Vodafone Idea also have enormous debts and would not want to jeopardize their financial position.

That means 700MHz spectrum, which remained unsold during an auction in 2016, is unlikely to find any buyers.

Authorities have already reduced the cost of these airwaves from INR114.85 billion ($1.5 billion) in 2016 to INR65.68 billion ($890 million) per MHz.


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This frequency band comes at a premium because it is more efficient and could allow telcos to bring down their capital expenditure.

Even so, the industry still believes the base prices are on the high side.

Winning bidders will have the option of paying the entire amount upfront or spreading payments over a longer period.

"In addition to the bid amount, successful bidders will also have to pay 3% of the adjusted gross revenue (AGR), excluding wireline services as spectrum usage charges (SUC) for the spectrum won through this auction," said the government.

An auction of 3.3GHz and 3.6GHz spectrum intended for use with 5G services will be held later in 2021.

— Gagandeep Kaur, contributing editor, special to Light Reading

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