5G spectrum auction: Telcos place bids worth around Rs 11,000 crore on day 1

Telecom auction 2024

Indian private telecom operators placed bids worth over Rs 11,000 crore on the first day of the 5G spectrum auction, which saw five rounds of bidding. The bidding will resume on June 26.

The Indian government is selling airwaves worth Rs 96,317.65 crore.

Reliance Jio, Bharti Airtel and Vodafone Idea are believed to have bid for the sub-GHz band, 900 MHz and select mid-bands, 1800 MHz and 2100 MHz, to bolster their respective 5G holdings, sources said.

Telecom companies have shown interest in 800, MHz, 900 MHz, 1800 MHz, 2100 MHz, 2500 MHz, 3300 Mhz and 26 GHz bands on June 25, as per the Day 1 report published on the Department of Telecommunications website.

On day 1, telcos bought 60.4 MHz spectrum in the 900 MHz band for Rs 7,004 crore, 50.6 MHz spectrum in the 1800 MHz band for Rs 3,614 crore and 20 MHz in the 2100 MHz band for Rs 546 crore, as per day 1 report analysis done by telecom expert Parag Kar.

Spectrum bought in this auction will be valid for 20 years. Telcos can share, trade, lease, and surrender the spectrum after 10 years.

Telcos might opt to pay the full amount upfront to save on interest costs. The interest rate for deferred payments in this auction is 8.65 percent, higher than the 7.2 percent rate in the 2022 auction.

For them, payment options include part payments with corresponding moratoriums or 20 yearly instalments, with the first due 10 days post-auction. Pre-payment is allowed without penalty.

In the 2022 auction, the government garnered a record Rs 1.5 lakh crore.

Reliance Jio, Bharti Airtel Ltd, and Vodafone Idea submitted Rs 4,350 crore as earnest money deposits. Reliance Jio deposited the highest Rs 3,000 crore, Bharti Airtel Rs 1,050 crore, and Vodafone Idea Rs 300 crore.

Telcos can bid three to four times the amount based on their earnest money deposits.

Bharti Airtel could emerge as the biggest spender in the 2024 spectrum auction with an outlay of Rs 10,400 crore as the telecom major aims to firm up its sub-1GHz holdings and raise its share of 1800-MHz and 2300-MHz bands, according to analysts. It is facing renewals for 42 MHz of spectrum in six circles of Assam, Bihar, J&K, Orissa, UP East, and West Bengal.

COAI, the representative body for private telecom companies, said the ongoing 5G spectrum auction will help catalyse the rapid rollout of 5G services across the country, leading to enhanced coverage and vastly improved connectivity.

“The 5G auctions will catalyse the rapid rollout of 5G services across the country, leading to enhanced coverage and vastly improved connectivity. Moreover, successful deployment of 5G will be a major stride towards achieving digital inclusion," SP Kochhar, director-general of COAI, said in a statement.