Next round of 5G spectrum auction on May 20: Telecom Department

Spectrum held by certain companies that are undergoing insolvency and which expire in 2024 on completion of the term will also be put to auction.

India's next spectrum auction is set to begin on May 20, according to the notice inviting applications (NIA) document released by the Department of Telecommunications on March 8.

All the available spectrum in 800, 900, 1,800, 2,100, 2,300, 2,500, 3,300 MHz, and 26 GHz bands will be put to auction at a base price of Rs 96,317.65 crore. Spectrum held by certain companies that are undergoing insolvency and which expire in 2024 on completion of the term will also be put to auction.

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.

Telecom secretary Neeraj Mittal at the recent Mobile World Congress told reporters that telcos may not spend big this year on spectrum, especially since they bought a lot in the previous auction and will primarily top-up expiring spectrum for their ongoing operations.

“One should not expect that the government will net Rs 5 lakh crore,” he said, he said, indicating that the government’s target for the upcoming auctions is lower than the Rs 1.5 lakh crore netted in the 5G spectrum auction in 2022.

The telecom department expects around Rs 10,000 crore from the auctions.
Bharti Airtel and Vodafone Idea will go for renewing the older licences that will expire in the 4G bands of 1,800 Mhz and 900 Mhz. Renewal of spectrum is due in 900 and 1800 MHz bands in eight circles – Uttar Pradesh (East), Uttar Pradesh (West), West Bengal, Assam, Bihar, Jammu and Kashmir, North-East, and Odisha in February.

Airtel and Vodafone Idea need to renew airwaves worth around Rs 4,200 crore and Rs 1,950 crore, respectively, while market leader Reliance Jio does not have any spectrum renewal slated for this year, as per brokerage Jefferies.

As recommended by the TRAI, the reserve prices for various bands have been revised using suitable indexation, the Union Cabinet informed on February 9.

As per the NIA document, spectrum winners must settle the payment within ten days of receiving the demand note, either in whole or partially, with the option for 20-year instalment plans at 8.65% interest. Moreover, a moratorium is available based on upfront payment, followed by instalment payments.

The auctioned spectrum, awarded for a 20-year term, will not incur any spectrum usage charges (SUC). After this period, carriers must repurchase it from the government.

The spectrum acquired can be shared, traded, and leased among telecom service providers after one year from the frequency assignment date, with surrender options available, as per the NIA document.

In the last spectrum auction in 2022, the government offered 72,097.85 MHz of spectrum with a 20-year validity period. Reliance Jio spent Rs 88,078 crore on 5G spectrum, followed by Bharti Airtel at Rs 43,084 crore and Vodafone Idea at Rs 18,799 crore.