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India will make 10,523.15MHz of spectrum available to telcos for a base value of $11.65 billion in May auction.
India's Department of Telecommunications (DoT) announced it will hold a spectrum auction starting May 20 this year. A total of 10,523.15MHz of spectrum worth 963.17 billion Indian rupees ($11.65 billion) will be put up for sale.
Spectrum in several frequency bands, including 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300MHz and 26GHz, will be available for service providers to purchase. Significantly, the government is not offering 700MHz spectrum in the auction. In the last auction, Reliance Jio, India's largest service provider, acquired pan-India 700MHz spectrum, which it uses to offer 5G standalone (SA) services.
According to the Notice Inviting Applications (NIA) issued by the DoT, the interested companies need to apply by April 22. This would be followed by a mock auction on May 13 and May 14 before the actual auction starts on May 20. A company must have a Unified Access Services Licenses (UASL) or Unified License (UL) to bid for the spectrum, the NIA specifies. However, a company can also give an undertaking that it will acquire a UASL/UL license to participate in the auction.
Even as the government goes ahead with the auction, it is aware that the response will be subdued. "The next spectrum auction will be a limited auction because an already large part of the spectrum required by the industry was auctioned last year," said Ashwini Vaishnaw, Minister for Communications and IT.
Muted response
A key reason for anticipated muted response is that the service providers invested a significant amount in acquiring the 5G spectrum in an auction held in 2022 but have yet to start monetizing it. The top two telcos, Reliance Jio and Bharti Airtel, have launched 5G services but have yet to announce tariffs for them. It is safe to say that they have a significant inventory of yet-to-be-utilized spectrum, as Jio and Airtel together have just a little over 100 million 5G subscribers. On the other hand, Vodafone Idea is likely to commercially launch 5G services only later this year.
However, Airtel and Vodafone Idea will bid for their expired spectrum. Last month, the government approved a fresh spectrum allotment to these two telcos to avoid service disruption in circles (service areas) where their 20-year lease had come to an end. This was allowed only until the auctions are held.
Airtel is likely to renew its spectrum in 900MHz and 1800MHz frequency bands in six circles of Uttar Pradesh (East), Uttar Pradesh (West), Assam, Bihar, West Bengal, Odisha, and Jammu and Kashmir. Vodafone Idea's license is, meanwhile, coming to an end in West Bengal and Uttar Pradesh (West).
During the last auction in 2022, the government earned INR1.5 trillion ($18.19 billion). It has decided to hold one spectrum auction every year to ensure telcos are never short of spectrum.
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