Spectrum Auction Could See Bids Around Rs. 30,000 To Rs. 60,000 Crore: Report

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        | Updated: Monday, December 21, 2020, 23:45 [IST] The upcoming spectrum auction is likely to see a tepid response from telecom operators due to the financial conditions of the sector. Besides, the bids are expected to be between Rs. 30,000 crore to Rs. 50,000 crore, despite the fact that the government…

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The upcoming spectrum auction is likely to see a tepid response from telecom operators due to the financial conditions of the sector. Besides, the bids are expected to be between Rs. 30,000 crore to Rs. 50,000 crore, despite the fact that the government is looking to garner Rs. 3.92 crores from the spectrum auction.

The government is planning to sell a total of 2,251.25 MHz under the coming auction. It includes 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz bands. Notably, the operators are allowed to use the given spectrum for 20 years.

“The auctions are expected to fetch Rs. 55,000 crore-Rs. 60,000 crore to the exchequer. Even at this participation, the industry will have to shell out around Rs. 20,000-Rs. 25,000 crore upfront, while the balance will have to be paid over 16 years, after a two-year moratorium,” said Ankit Jain, Assistant Vice President, ICRA.

On the other hand, JM Financial Financial Services Group expects that bids might be around Rs. 30,000 crore, whereas the spectrum is valued at Rs. 3.92 lakh crore, which means the auction will see limited participation by telecom operators.

“We do not see the possibility of large-scale bidding, as telcos will focus on the renewal of expiry spectrum/ augmenting capacity in select circles and there is enough spectrum available with all telcos,” Axis Capital said in a report.

It is worth mentioning that Airtel is providing 12.4 MHz and 47 MHz in 900 MHz and 1800 MHz spectrum bands. Meanwhile, Vi (Vodafone-Idea) is likely to renew 6.2 MHz of spectrum and 38.2 MHz in both 900 MHz and 1800 MHz bands. Similarly, the Credit Suisse report said that India’s third-largest telecom operator Vi is likely to spend Rs. 15,000 crore and Airtel to spend Rs. 11,500 crore in the auction.

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