Countdown to 5G: Spectrum Auction Kicks Off on June 25th

The government’s decision to reopen the auction for the 5G spectrum, valued at a staggering 96,000 crores, on June 25th is a significant event for the telecom industry. Major players like Reliance Jio, Bharti Airtel, and Vodafone Idea have already begun submitting their bids for crucial radio frequencies that will be the backbone of their Mobile internet services. This auction will encompass eight bands, including 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz, and the strategies of these companies will play a crucial role in the outcome.

As per Moneycontrol, the government plans to sell only 17% of the spectrum to raise around Rs. 10,000 crore from the auction. However, they predict that due to low demand, the government’s earnings could range from Rs. 4000 crore to Rs. 16,600 crore. The company that gets the spectrum will get a 20-year license, and also, the companies will be able to sell, trade, lease, or surrender after ten years of allotment of the spectrum.

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Reliance Jio has submitted the highest earnest money deposit (EMD) of around Rs. 3000 crores, which gives it the opportunity to bid for the maximum radio waves. Bharti Airtel submitted an EMD of 1,050 crores and Vodafone Idea of Rs 300 crore per the details released by the Department of Telecommunications. 

As per the Economic Times, “Vi is likely to focus on strategic acquisitions, particularly in the 26 GHz band, to bring down its spectrum usage charge. The 3300 Mhz band is likely to attract the interest of Reliance Jio and Bharti Airtel as it is one of the key bands for providing 5G services with low capital expenditure.” 

They further mentioned that this auction would be a muted affair because of the submission of EMDs that were lower than expected. “The expectations of a muted bidding is due to the modest earnest money deposits (EMDs) — in the Rs 300-3,000 crore range — submitted by the telcos, which are the lowest since the 2014 sale and almost 79-86% lower than the submissions in the previous 5G auction of 2022.”

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