All you need to know about Spectrum Auction 2024-25

Cabinet approves spectrum sale, to auction Rs 96,317.65 crore airwaves.

A total of 10,523.15 MHz of spectrum across bands will be auctioned at a reserve price of Rs 96,317.65 crore.

What all will be put for an auction?
The government will auction all the available spectrum in the 800, 900, 1800, 2100, 2300, 2500, 3300 MHz, and 26 GHz bands.

The government will also auction spectrum held by certain companies undergoing insolvency proceedings and those expiring in 2024 on completion of the term.

The spectrum purchased by bidders at this auction will be valid for 20 years.
“The leftover spectrum in the 2022-23 auctions, the ones expiring in 2024, and the spectrum which companies have surrendered will be put to auction,” said Anurag Thakur, minister of information and broadcasting.

Auction in 2024-25

The government did not announce a timeline, but the next round is likely in the coming few months.
Usually, a window of 9-10 weeks is required between the release of the notice inviting applications (NIA) and the actual auction. Following the cabinet decision, the Department of Telecommunications (DoT) will soon issue an NIA, the legal document laying down auction rules and processes. Auctions typically start 45-50 days after the NIA is issued.

Fresh spectrum allotment to Airtel and Vi

The cabinet has also approved fresh spectrum allotment to Bharti Airtel and Vodafone Idea (Vi), the country’s second and third largest telecom services companies, until the auction is conducted to avoid any disruption in telecom services.
In the interim period, both telcos can continue to use the spectrum by paying the price determined in the last auction.
For Airtel, renewal of spectrum is due in the 900 and 1800 MHz bands in six circles—Uttar Pradesh (East), Uttar Pradesh (West), West Bengal, Assam, Bihar, Jammu and Kashmir, and Odisha, worth Rs 4,200 crore. Vi’s licence expires in West Bengal and Uttar Pradesh (West) circles worth Rs 1,950 crore.

Thin demand?

DoT expects a subdued response from telecom operators as demand is expected to be restricted to spectrum that will be up for renewal in some circles.

The government is expecting revenue of around Rs 10,000 crore from the upcoming auction.

Earlier this month, communications and IT minister Ashwini Vaishnaw spelt out why the quantum of airwaves would be less at the forthcoming spectrum auction.

“...The next spectrum auction will be a limited auction because an already large part of the spectrum required by the industry was auctioned last year. Every financial year, we are trying to have one auction. We are working on a proposal. Wherever required or wherever smaller chunks that are left out will be put to auction,” Vaishnaw said. “This will be a significantly smaller auction,” he said.

Vaishnaw added that the government was moving fast to organise the auction.

Who spent what in 2022

In the last round of bidding, in 2022, the government had put 72,097.85 MHz of spectrum up for auction with a validity period of 20 years. Reliance Jio, India’s largest telco, spent Rs 88,078 crore towards 5G spectrum, followed by Bharti Airtel with Rs 43,084 crore and Vi with Rs 18,799 crore.
Analysts at Jefferies said that the spectrum acquired by telcos in 2022 remains largely unutilised, another reason that telcos are expected to do limited bidding this time around.

With spectrum renewals due mainly in the 900 MHz band, demand will be only from Bharti and Vi, which should limit spectrum renewal risks and price escalations during the upcoming auction, the Jefferies analysts said. “After the 2022 auctions, spectrum market share for Reliance Jio and Bharti Airtel (sans 26 GHz) are largely the same at a pan-India level,” they wrote.

Spectrum reforms

The government will also set up a committee of secretaries to consider re-farming existing spectrum usage to increase the availability of airwaves to meet future needs. Chaired by the cabinet secretary, the panel that will finalise a plan to repurpose allotted spectrum in specific bands will have representatives from all relevant stakeholders.

Spectrum is used for various purposes including but not limited to space communications, broadcasting, defence and mobile telephony. The government also said spectrum usage may need to be revised as technologies evolve.

Spectrum allocated for Kavach technology

The cabinet has also approved the allocation of an additional 5 MHz spectrum in the 700 MHz band for Indian Railways for its Kavach anti-collision technology. An additional 5 MHz spectrum in the 700 MHz band has also been approved for the National Capital Region Transport Corporation.

“It has been decided that this 5 MHz spectrum will be assigned to multiple regional and urban rail-based transit systems. Considering the additional requirement for the national rollout of Kavach, an additional 5 MHz in the 700 MHz spectrum will be reserved for Indian Railways. This will improve passenger safety and the operations of these transportation systems,” the government said in an official statement.

Notably, TRAI had on February 7 sought stakeholders' views on the assignment of additional spectrum to Indian Railways. DoT had in mid-2023 informed TRAI that Indian Railways wanted an additional 5 MHz of paired spectrum in the 700 MHz band to be allocated for enhancing its safety and security systems.