Spectrum auction: All you need to know

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26 Aug, 2025 12:21

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Eight telecom firms will battle it out at the spectrum auction on Monday. The government expects to garner at least Rs 11,300 crore upfront from the auction for this fiscal.

Also Read: Supreme Court refuses to stay spectrum auction

Here's a quick look at what the auction means, the various players involved, and the implications.

Present Scenario

*The Department of Telecom has put on the block around 385 MHz of radiowaves in the 1800 MHz band, and 46 MHz in the 900 MHz band.

*The final list of bidders includes Bharti Airtel, Vodafone, Reliance Jio Infocomm, Idea Cellular, Telewings (Uninor), Reliance Communications (RCom), Tata Teleservices and Aircel.

The SC Drama

*The Supreme Court on Thursday refused to extend the licences of Airtel, Vodafone and Loop Telecom, thus asking them to bid for the auctions.

* The three telecom companies wanted the SC to cancel or defer the 900 MHz spectrum auction. They also sought extension of their licences, which is due to expire on November 2014, by another 10 years.

*The telecom operators even agreed to pay market-determined price for spectrum.

*The telcos cited recommendation made by expert committee headed by Subodh Kumar, additional secretary in the telecom ministry, that existing licensees could be offered the right of first refusal at the time of licence renewal.

Auction: How different it will be this time

*The current spectrum auction is likely to be different from the earlier auctions

* Analysts expect more rational bidding from operators for 1800 MHz, while bidding for 900 MHz could get a bit aggressive, they feel

* The base price for 1800 MHz is Rs 1,765 crore per MHz, which is 26 percent lower than the reserve price set in the March auction and 51 percent lower than November 2012 auction.

*The base price for 900 MHz is 53 percent lower than the previous auction price. It has been set as Rs 360 crore per MHz for Delhi, Rs 328 crore for Mumbai and Rs 125 crore for Kolkata.

* The quantum of spectrum coming up for 1800 MHz auction is higher. It is 385 MHz against 295 MHz in November 2012.

* More spectrum in different bands is expected to be released in the future, thus decreasing the fear of scarcity.

* Potentially lower spectrum usage charge at 5% gives incentive for bidding.

What it means and who will benefit

* With more players in the market the competition is expected to get tougher.

* The earnest money deposited by telcos are -- Rel Jio (Rs 2,596 crore ), Vodafone (Rs 2,800 crore), Bharti ( Rs 3,700 crore) and Idea (Rs 1,567 crore)

* Rel Jio had won broadband spectrum in the 2300 MHz band in 2010 but has not been able to launch services due to inefficiencies associated with the particular frequency band. Additional bandwidth in lower frequencies bands of 1800 MHz and 900 MHz could be useful. Going by the earnest money deposited by the company, it looks like Rel Jio will bid for pan Indian spectrum. Analysts say it is possible that Rel Jio is likely to bid for 1800 MHz band instead of 900 MHz band.

* If Rel Jio does bid for 900 MHz then the competition could hot up as incumbent players Airtel, Vodafone and Idea Cellular will try to retain their existing ownership.

* Incumbents could either lose the customers or have to take pre-emptive price cuts to retain them. This could also put pressure on current optimistic margin expectations.

* Existing players may be forced to step up network investments/capex in order to defend their business against a well-capitalised new entrant.

Written for the web by Kankana Roy Choudhury