With a certain quantum of spectrum held by Bharti Airtel and Vodafone Idea due for renewal next month (at the end of 20-year lease period), the department of telecommunications (DoT) has sought Cabinet’s approval for fresh allotment on administrative basis till the time auctions are conducted.
The government needs at least 45 days to conduct auctions. The DoT is also seeking Cabinet’s approval on holding the next spectrum auction, which it expects to conduct in March.
“Whenever spectrum is due for renewal but there’s delay conducting auctions, the government can make interim allocation with Cabinet’s approval,” an official said. Telcos will be allotted spectrum administratively for three months on the basis of the last reserve price in the given band and will pay the differential after the auctions are held.
For Airtel, renewal of spectrum is due in 900 and 1800 MHz bands in six circles – Uttar Pradesh (East), Uttar Pradesh (West), West Bengal, Assam, Bihar, Jammu and Kashmir, and Odisha. For Vodafone Idea, the licence is expiring in two circles – West Bengal and Uttar Pradesh (West).
The value of expiring spectrum is only about Rs 6,100 crore — Airtel: Rs 4,200 crore and Vodafone Idea: Rs 1,900 crore. From the upcoming auction, DoT is also expecting a subdued response from telcos as demand is expected to be restricted to airwaves which will be up for renewal in some circles. The goverment is not expecting anything beyond Rs 10,000 crore revenue from the upcoming auctions.
According to officials, a weak response is expected this time as telecom operators have acquired 4G/5G spectrum worth Rs 1.5 trillion in the last spectrum auctions in 2022. The operators have incurred a lot of capital expenditure in terms of deploying the recently acquired spectrum, and therefore, they would first want to recoup their investments before acquiring further spectrum, according to analysts.
In the upcoming auction, spectrum bands in 700 MHz, 800 MHz, 900 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz, and 26 GHz worth about Rs 2.5 trillion is expected to be put on sale by the government.
In the last spectrum auction, Reliance Jio spent Rs 88,078 crore towards 4G/5G spectrum, followed by Bharti Airtel at Rs 43,084 crore, and Vodafone Idea at Rs 18,799 crore. Financial Express