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Spectrum auction expected in February

The next spectrum auction will be held in late February 2024 and the reserve price for most bands will remain the same as the 2022 auction, department of telecommunications (DoT) officials have said.

The government expects operators to go for low bands beginning in 600 megahertz (MHz), licences for many of which are lapsing soon.

Back in September 2021, the government had decided that spectrum auctions should be held annually. Officials said work is underway to ensure this happens.

The reserve price of all low bands spread from 600-2300 MHz, mid (3300 MHz) and 26 Gigahertz (Hz) high bands is expected to remain the same as the 2022 auction, they added. This had been suggested by the Telecom Regulatory Authority of India (TRAI) earlier this year. However, prices of newer bands such as 37 GHz are yet to be recommended by TRAI.

Projections indicate that the auctions will generate much less revenue for the government as 5G operators Jio and Airtel have already acquired most of the airwaves they need.

Lower earnings
In November, Bharti Airtel Managing Director (MD) & Chief Executive Officer (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 as it 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 told Business Standard that the company will follow a similar strategy as well since it does not require large quantities of spectrum. It had acquired 24,740 MHz of 5G airwaves worth Rs 88,000 crore.

In the last round of auctions ending 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 per cent of the total was sold with the bid amounting to Rs 1.5 trillion. This was almost double the Rs 77,815 crore worth of 4G airwaves sold in 2021, and triple 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 telcos should follow suit quickly. Both had purchased 5G airwaves in the band at the last spectrum auction in 2022, but are yet to start 5G services.

The 26GHz band has seen interest from all telcos at the last spectrum auction, given its utility for captive networks and the scrapping of spectrum usage charges from the current auctions. As much as 72 per cent of the spectrum on offer in this band received bids.

With Jio having aggressively picked up airwaves in the band during the last auction, it may be Airtel’s turn to do so in the next auction, industry insiders said. They also pointed out that the band was priced relatively lower. With the same thing happening this time, it may lead to continuing interest in the band.

But earlier this year, telcos had complained about the lack of a device ecosystem which supports the 26 GHz band. Industry sources said the telcos had also approached DoT to relax the mandatory rollout rules. Business Standard

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