CLSA says government might cut spectrum reserve price ahead of 5G auction: Report
At the spectrum auction on March 1 and 2, the government received bids worth Rs 77,814.80 crore.
March 04, 2021 / 02:52 PM IST
Representative image (Pixabay)
Ahead of the 5G auction, the government might cut the reserve price of spectrum, since 63 percent of spectrum was unsold at the auction this week.
"With 63 percent of the spectrum in this auction unsold, there will likely be cuts in reserve prices. Historically, the government has cut spectrum prices by 30-40 percent if it saw no demand in the previous auction and this will be a significant positive, especially for 5G," CLSA analyst Deepti Chaturvedi was quoted as saying by business daily Business Standard.
"In future 5G auctions, with the 275MHz spectrum available in the 3.33.6gigahertz bands alone (besides other bands) and only three operators, there will be good supply," Chaturvedi said.
Also read: Here's how the telecom spectrum auction fared in 2021 versus 2016
During the 4G spectrum auction on March 1 and 2, the government received bids worth Rs 77,814.80 crore.
Reliance Jio emerged as the biggest buyer by acquiring a total of 488.35 MHz of spectrum for Rs 57,122.65 crore, followed by Bharti Airtel with 355.45 MHz at Rs 18,698.75 crore. Vodafone Idea purchased 11.80 MHz for Rs 1,993.40 crore.
Out of 2308.80 MHz of spectrum put for auction, the government received bids for 855.60 MHz.
"The auction bid placements should further strengthen the two larger operators (Airtel and Jio), both of which remain well positioned to gain market share from Vi. With large investments in network, tariff hikes are inevitable," said Kunal Vora of BNP Paribas said, as quoted by Business standard.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.