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Telecom spectrum auction faces dim prospects with likely license renewals

Telecom spectrum auction this year could be a damp squib and the exchequer may get very little amount as most of the telecom service providers (TSPs) have enough spectrum for now and could be just renewing their existing licences.

The government fetched ₹1,50,173 crore from the last auction, which took place in 2022, and Mukesh Ambani-led Reliance Jio was the highest bidder buying radiowaves worth ₹88,078 crore.

According to sources, the Department of Telecommunications (DoT) expects to garner at least half of the amount of the last auction, but industry analysts say it could be much lesser than that.

“Most of the telcos have enough spectrum already and they require very little for those circles for which the licences are expiring. Whether it is Bharti Airtel (Airtel) or Vodafone-Idea (VIL), they have enough spectrum and would acquire only those spectrum wherever required. So, the telcos would skip purchases from the upcoming auctions,” said an analysts.

For instance, Airtel may purchase certain spectrum (around 25 MHz) in the 900 and 1,800 MHz to strengthen its 5G network, and also for certain circles such as West Bengal, Uttar Pradesh, Bihar, Jammu & Kashmir, and Odisha, where the licences are expiring.

Similarly, VIL may also acquire very little spectrum for just renewing its licenses in certain circles.

“Telcos don’t need fresh spectrum now for mobile services, and satellite spectrum is also being allocated administratively, so we will not see bidding process as we used to see earlier. Telcos like Reliance Jio also has enough spectrum in its stock, so don’t think will invest much on new spectrum,” said a Delhi-based industry veteran on condition of anonymity.

He said the government is also unlikely to put 600 MHz for auction because of a little demand from the industry.

The DoT is expected to issue notice inviting applications (NIA) in the next few days, and the auctions may begin in the next 45 days after that. It is the legal document that lays down auction rules and process.

In the 2022, a total of 72 GHz of radiowaves worth at least ₹4.3-lakh crore was put on the block for auction, of which 75 per cent were sold. Spectrum in 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands were put for auction. The Hindu BusinessLine

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