Next spectrum auction to be held in February, reserve price to remain same
The next spectrum auction will take place in late February 2024 and the reserve price for most bands will remain the same as the 2022 auction, Department of Telecommunications (DoT) officials said. The government expects that operators will opt for low bands from 600 MHz, the licenses of which will soon expire.
In September 2021, the government had decided that spectrum auctions should be held annually. Officials said work is underway to ensure the same.
The reserve price of all low bands, spanning 600-2300 megahertz (MHz), mid (3300 MHz) and 26 gigahertz (GHz) high bands, is expected to remain the same as in the 2022 auction, they added. This was suggested by the Telecom Regulatory Authority of India (TRAI) earlier this year. However, the prices of newer bands such as 37 GHz are yet to be recommended by TRAI.
However, projections indicate that the auctions would generate much less revenue for the government as 5G operators Jio and Airtel have already acquired most of the airwaves they need.
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Lower income
In November, Bharti Airtel Managing Director and CEO Gopal Vittal said the company will spend significantly less on future auctions as it will not require additional airwaves. As a result, it is also expected to miss out on the expensive 700 MHz spectrum, which Reliance Jio had acquired in the last auction. Instead, it will refresh the spectrum in a few circles. This includes mid-band waves such as 1800 MHz and 2100 MHz for 5G services.
Meanwhile, senior officials at Reliance Jio told Business Standard that the company will follow a similar strategy as it also does not require large amounts of spectrum. It had acquired 24,740 MHz of 5G airwaves worth Rs 88,000 crore.
In the latest round of auctions that ended on August 1, 2022, the government had made available 72.098 MHz of 5G spectrum that can provide ultra-fast mobile internet connectivity with a validity of 20 years. Of this, 51,236 MHz or 71 percent of the total was sold, with the total bid amounting to Rs 1,50,173 crore. This was almost double the Rs 77,815 crore worth of 4G airwaves sold in 2021, and three times the Rs 50,968.37 crore the government received from 3G spectrum auctions in 2010.
Vodafone Idea and Adani Data Networks had told Business standard last week that other telecom companies should quickly follow suit. Both had purchased 5G airwaves in the band during the last spectrum auction in 2022, but are yet to start 5G services.
The 26GHz band has attracted interest from all telecom companies in the last spectrum auction, given its usefulness for captive networks and the removal of spectrum usage charges from the current auctions. As many as 72 percent of the spectrum offered in this band received bids.
With Jio aggressively picking up airwaves in the band in the last auction, it may be Airtel's turn to do the same in the next auction, industry insiders said. They also pointed out that the tire was priced relatively lower. The same thing happening this time could lead to continued interest in the band.
But earlier this year, telecom companies had complained about the lack of a device ecosystem that supports the 26 GHz band. Industry sources said the telecom companies had also approached DoT to relax the mandatory rollout rules.