Spectrum auction: Analysts see rational bidding this time

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26 Aug, 2025 12:21

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The auction for spectrum in the 1800 MHz and 900 MHz bands gets underway today. But unlike on the previous occasions, brokerages are expecting telecom companies to be more realistic in their bids and not overpay. Not great news for the government, which is expected to net around Rs 55,000-57500 crore (around Rs 11,000 crore upfront for this fiscal, and the rest in instalments). Still, the government would prefer that the telecom companies bid what they can afford to pay, rather than not being able to pay up later on.

A snapshot of what telecom analysts have said in their reports:

Motilal Oswal Securities:  Due to significant spectrum supply pipeline, bidding unlikely to be irrational. Apart from the 403 MHz of 1,800 band spectrum and 46MHz of 900 band spectrum being put up for auction in February 2014, there is significant supply pipeline of spectrum likely to be auctioned over the next 6-18 months including: 1) 800 MHz band spectrum, 2) 15MHz of 2,100 MHz spectrum, and 3) 700 MHz band spectrum.

UBS: We expect bidding to be rational in the upcoming spectrum auction given the financial state of the sector and availability of sufficient spectrum in the auction

Kotak Securities: Ril Jio bidding for 900 will be an interesting scenario; however, even there we do not anticipate material increase in spectrum prices (around 25% higher) and a Bharti Airtel and Vodafone will perhaps settle with 5 MHz of 900 spectrum (versus the 6.2-8 MHz they hold currently) in their renewal circles to prevent a bidding war.

Morgan Stanley: We expect the spectrum auctions to happen at a 20% premium to the reserve price, and if the entire spectrum available for auction is sold, we estimate that the government could raise around Rs 57,500 crore.