Vodafone wins the auction, followed by Airtel, Jio, and Idea

Thursday witnessed the end of the India’s largest but tepid Spectrum sale. The government raised 657.9 billion rupees against the spectrum of Rs. 5.6 trillion. This means nearly 60% of the airwaves were left unsold, including the premium 4G bands. Around 956 MHz was sold by the government amounting to 41% of the total spectrum put up for sale. The sale also missed the estimates of brokerages who estimated that it would raise between 75,000 to 80,000 crores.

Manoj Sinha, the Telecom Minister, said that the government would receive around 32,000 crores upfront, excluding the service tax. The payment is the highest in last five years and will be in line with the new norms requiring telecoms to pay 25% of the price upfront for the Spectrum in 700, 800 and 900 MHz band and 50% for the frequencies higher than that. The payments will have to be made in ten days after the approval of sales.

A Glance at the Auction:

A total of 2,354.55 MHz was put up for sale in seven different bands amounting to Rs. 5.63 trillions. Among that only 965 MHz was sold and that amounted to Rs. 65,789.12 crores. 700 and 900 MHz remained unsold mainly because of the high reserve or auction start price set by the Government. 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz remained most demanded. In 800 MHz band, 73.75 MHz was put up for sale and only 15 MHz was sold. In 1,800 MHz band, from 222 MHz, 175 MHz was sold. The 2,100 MHz spectrum stood completely sold. Only 85 MHz from the available 360 MHz in 2,300 MHz band was sold and in 2,500 MHz, 370 MHz from the available 600 MHz was sold.

Who bought what and for how much:

Vodafone won the war taking home the Spectrum over Rs. 20,000 crores while the data about the quantum it bought is unavailable.

Airtel bought 173.8 MHz spectrum worth Rs. 14,244 crores across the bands of 1,800 MHz, 2,100 MHz and 2,300 MHz bands. This has further strengthened the Pan-India spectrum portfolio, fulfilling its requirement for the next 20 years. Bharti Airtel now has 3G and 4G spectrum in all circles which is the widest mobile footprints across the country.

Jio acquired the rights to use the spectrum of 269.2 MHz across 800 MHz, 1800 MHz and 2300 MHz bands worth Rs. 13,673 crores across all 22 service areas.

Idea has acquired the spectrum of 349.20 MHz worth Rs. 12,798 crores, securing a Pan-India wireless broadband footprint across the country. Idea is focusing on expanding its wireless broadband presence like never before, mainly in 4G LTE technology.

Tata Teleservices bought the spectrum worth over Rs. 4,000 crores while the quantum of the spectrum is yet unknown.

The Unsold Spectrum:

Airtel has urged the government to lower the price of 700 MHz band. It said that the pricing of 700 MHz band spectrum needs to be addressed on the priority basis for the nation to benefit from the digital dividend that will be obtained out of this high-quality spectrum band. It had also said that three to four national operators with strong 700 MHz based broadband networks have the capacity to accelerate India’s progress to top league digitally enabled nations.

The director general of the Cellular Operations Association of India, Rajan Matthews, said that the 700 MHz ecosystem will be ready in two years. But to have buyers in that band, the price needs to be placed appropriately.

The government is considering selling its most expensive airwaves of 700 MHz and 900 MHz bands in about two years. Sources have informed that government might consider lowering the minimum price of the spectrum.

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