The just concluded spectrum auction should not be considered a benchmark for future sales, as telecom operators stocked up during the 2022 auctions and are yet to use the air waves fully, a government official said.
Telecom operators bought 141.4 MHz of radio waves for Rs 11,341 crore, the government said.
The auction was one of the shortest, ending on the second day. Out of the 10,523 MHz up for sale at a reserve price of Rs 96,317.65 crore, only 1.34 percent of the available spectrum was was acquired.
“This year’s auction cannot be considered as a benchmark because demand and supply change every year. In the previous auction, telcos bought over 10Ghz of spectrum and this year, for instance, 99 percent of the airwaves did not see any demand,” the official said.
The outcome was better than expected, the official, who spoke on condition of anonymity, said. The department had estimated bids worth a maximum of Rs 10,000 crore.
“As the telcos build out their coverage and rollouts become aggressive, the demand for 5G spectrum will also rise in the next auctions,” the official said.
A significant portion of the airwaves purchased — 87 MHz valued at around Rs 6,000 crore — was acquired to enhance services, driving bids beyond expectations. Telcos bought 54 MHz to renew spectrum that expired earlier this year.
“As the auction for 5G spectrum was held recently and 5G monetisation is still in progress, no bidding took place in 800 MHz, 2,300 MHz, 3,300 MHz and 26 GHz bands. A total quantum of 141.4 MHz (26.5%) was sold from the balance 533.6 MHz Spectrum. This is even though a very large amount of spectrum i.e., 51.2 GHz of spectrum was sold in August 2022," the ministry of communications said in a statement.
Bharti Airtel acquired spectrum worth Rs 6,857 crore, Reliance Jio spent Rs 973.62 crore and Vodafone Idea Rs 3,510.4 crore at the auction.
Airtel acquired 97 MHz spectrum in 900 MHz, 1,800 MHz and 2,100 MHz frequency bands, while Jio acquired 14.4 MHz spectrum in 1,800 MHz. Vodafone Idea acquired 30 MHz spectrum in 900 MHz, 1,800 MHz and 2,500 MHz.
Telecom operators can pay in full, partially or in equal instalments over 20 years, with an interest rate of over 8 percent.
As a result, the first instalment from the total auction proceeds in FY25 could be as low as Rs 567 crore.
“The telecom department had accounted for Rs 500 crore as proceeds from auction instalment in FY25. We will get a slightly higher amount than our estimates,” another official said.
In the 2024 Interim Budget, the government projected a non-tax revenue collection of Rs 1.2 trillion from the telecom sector for FY25. This represents a 28.5 percent increase over the revised estimate of Rs 93,540 crore for FY24.
Given that telcos will spread their payments for the purchased spectrum over the next 20 years, it remains uncertain whether the total proceeds from the latest sale will impact the target, the second official said.
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