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Cabinet approves spectrum auction with Rs 96,317 crore reserve price

The Cabinet on Thursday approved the next spectrum auctions set to be held later this year with a reserve price of Rs 96,317 crore. All the available spectrum in 800, 900, 1800, 2100, 2300, 2500, 3300 megahertz (MHz) and 26 gigahertz (GHz) bands will be put to auction.

“As recommended by the Telecom Regulatory Authority of India (TRAI), the reserve prices for various bands have been revised using suitable indexation,” the Cabinet said.

A committee, to be chaired by the Cabinet Secretary, will also be set up to finalise plans for re-farming of certain spectrum bands.
Back in September 2021, the government had decided that spectrum auctions should be held annually.

TRAI had last year suggested keeping the reserve price of all low bands spread from 600-2300 MHz, mid (3300 MHz) and 26 GHz high band, the same as the 2022 auction.

Less revenue projected
However, projections indicate 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.

The spectrum held by certain companies that are undergoing insolvency is expiring in 2024 on completion of the term. The Cabinet has also announced this will also be put to auction.

Last year in November, Bharti Airtel Managing Director & CEO Gopal Vittal said the company will be spending significantly less on future auctions since it does not require additional airwaves. As a result, it is also expected to give the expensive 700 MHz spectrum a miss, which had been acquired by Reliance Jio in the last auction. Instead, it will renew the spectrum in a few circles. This includes mid-band airwaves such as 1800 MHz and 2100 MHz for 5G services.

Meanwhile, senior officials at Reliance Jio had earlier told Business Standard the company will follow a similar strategy since it does not require large quantities of spectrum as well. It had acquired 24,740 MHz of 5G airwaves worth Rs 88,000 crore.

In the last round of auctions ending on August 1, 2022, the government had put up 72,098 MHz of 5G spectrum capable of offering ultra-high-speed mobile internet connectivity with a validity period 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 of the Rs 77,815 crore worth of 4G airwaves sold in 2021, and triple of the Rs 50,968.37 crore the government received from 3G spectrum auctions in 2010.

5G numbers in past 14 months:

  • More than 4.2 lakh Base Transceiver Stations (BTS) have been deployed in 14 months, covering 740 districts.
  • 13 crore-plus 5G subscribers.
  • India now the world’s second-largest 5G ecosystem.

Business Standard

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