Headlines of the Day
Jio, Airtel, Vi put in ₹13,475-crore deposits for spectrum auction
Telecom operators Reliance Jio Infocom (JRio), Bharti Airtel and Vodafone Idea (Vi) on Thursday put in their earnest money deposit (EMD) of ₹10,000 crore, ₹3,000 crore and ₹475 crore, respectively, for the upcoming spectrum auction, starting March 1.
The deposits are part of the applications that are mandatory to participate in the auction. The quantum of EMD is indicative of an operator’s bidding strategy as it gives the eligibility points (EPs) based on which it can target a certain quantum of airwaves in specific circles.
According to the Department of Telecommunications (DoT), the operators are qualified to bid in any band in any licensed service area (LSA), subject to EPs/EMD/spectrum cap.
Per DoT, Jio, with its highest deposits, gets 24,924 EPs while rivals Airtel and Vi get 73,007 points and 6,153 points, respectively. An EMD of this ticket would allow Jio to buy 4G spectrum worth ₹45,000-66,000 crore, underlining the telco’s need to renew expiring airwaves and add spectrum.
According to analysts, the government is expected to generate less than ₹50,000 crore from the upcoming auction as the most expensive 700MHz band may go unsold again, as it did in the 2016 auction.
A recent Credit Suisse report said most of the operators will be bidding for renewal of spectrum and, based on TRAI’s last reserve price, it expects the renewal of expiring spectrum to cost around ₹15,000 crore for Airtel and ₹11,500 crore for Jio.
“Reserve price for 700Mhz spectrum is 38 per cent higher than 800MHz spectrum with prices in three metro circles being 56 per cent higher compared to 800Mhz spectrum. We thus expect telcos to again give a miss to spectrum in 700 band. Further, we expect Jio to purchase additional spectrum (beyond expiring spectrum) as it will look to augment its network capacity having garnered 35 per cent subscriber market share and a much higher share of traffic,” it said.
However, it said that it does not expect Airtel to renew all the expiring spectrum given it has built up its spectrum holdings through M&A over the last three years.
The Cabinet on December 17, had approved the proposal for the auction of 2,251.25 MHz of spectrum worth ₹3.92 lakh crore at the base price. The bids would take place for spectrum in frequency bands of 700 MHz, 800Mhz, 900 Mhz, 2100 Mhz, 2300 Mhz and 2500MHz. The Hindu BusinessLine