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Spectrum auctions likely to fetch Rs 55,000-60,000 crore to the exchequer

The spectrum auctions are expected to fetch Rs 55,000 – 60,000 crore to the exchequer and even at this participation, the industry will have to shelve out around Rs. 20,000-25,000 crore upfront, ICRA said in a statement.

India plans to auction 2,251 MHz with a total valuation of Rs 3.92 trillion in March 2021. It will sell spectrum in 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300 MHz and 2500 MHz bands.

The DoT is expected to release Notice Inviting Application (NIA) in the next few weeks which will set the tone for spectrum auction in Q1CY21.

Ankit Jain, Assistant Vice President, ICRA Limited said that he expects moderate participation in the upcoming spectrum auctions, largely limited to renewal of the expiries, primarily in the 800 MHz and 1800 MHz bands, along with some consolidation of spectrum holdings.

Similar to previous auctions, telcos would have the option to pay a 25% upfront price for the 700MHz, 800MHz, and 900MHz bands and a 50% upfront price for the rest of the bands. The remaining amount would be payable in installments over 16 years post a two-year moratorium.

“ICRA does not foresee any major participation in the 700 MHz band,” Jain said in a statement.

“The steep pricing of the 700MHz spectrum has been maintained, leaving limited interest among telcos to buy this spectrum at such an exorbitant price,” Motilal Oswal said in a note.

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