India’s telecom spectrum auction ends early on day two, only 12% of spectrum sold

India’s spectrum auction concluded within a few hours of bidding on day 2, with telcos buying over ₹11,300 crore worth of radio waves in all, which is just 12% of the ₹96,238 crore minimum value that government had estimated for the spectrum on offer.

What were the spectrum waves on offer?

The auction, with a total of 10 GHz of spectrum ranging between 800 MHz to 26 GHz fetched total bids worth ₹11,340 crore, sources with knowledge of the matter told PTI. In all, only 140-150 MHz are estimated to have been sold in seven rounds.

Five rounds of bidding happened on the opening day on June 25, but Wednesday did not see much action, leading to officials declaring the end of the auction at around 11:30 A.M.

The 2024 auction that was held after a gap of nearly two years, saw radio waves in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz on offer.

The auction this time has been low-key as market watchers had anticipated limited bidding, with telcos primarily focusing on spectrum renewals, and selective sprucing up on radio waves for boosting their coverage.

Reliance Jio, Bharti Airtel and Vodafone Idea are vying for the radio waves that support high-speed mobile services, in these auctions.

As per the day-one spectrum auction report issued by the Department of Telecom on Tuesday evening, bidding took place mainly in the 900 and 1800 MHz bands. The operator also placed bids for the 2100 Mhz band spectrum in three circles.

How was this year’s spectrum auction different from last year’s?

During the last auction in 2022 – a blockbuster that turned out to be a seven-day affair, a record ₹1.5 lakh crore worth of 5G telecom spectrum was sold, with billionaire Mukesh Ambani’s Jio emerging as the top bidder, cornering nearly half of all the airwaves worth ₹88,078 crore.

At that time, telecom tycoon Sunil Mittal’s Bharti Airtel made a successful bid of ₹43,084 crore, while Vodafone Idea bought spectrum for ₹18,799 crore.

Bharti Airtel has spectrum expiring in six circles and VIL in two circles.

As it is, the low earnest money deposit (EMD) submissions by telcos ahead of the auction had reflected a selective appetite for radio waves.

How much have telcos paid up?

Analysts expect Bharti Airtel to bid for some of its expiring spectrum (it has renewals for 42 MHz of spectrum in 1800 MHz and 900 MHz band in six circles), while Jio – which has adequate spectrum across 4G and 5G bands – may be picky and selective, market watchers said. Jio, it is estimated, has shelled out ₹1,000 crore for spectrum in 1800 MHz bands in a couple of circles.

For the 2024 auction, the EMD submitted by telcos ranged between ₹300-3,000 crore – the lowest since the auctions in 2014 and down a staggering 80% over the previous auction in 2022. Reliance Jio has deposited the highest earnest money of ₹3,000 crore for the spectrum auction, Bharti Airtel has submitted ₹1,050 crore and Vodafone Idea submitted ₹300 crore.

Telecom industry body Cellular Operators Association of India, which counts Reliance Jio, Bharti Airtel and Vodafone Idea as members – had stated that auctions will catalyse the rapid rollout of 5G services across the country, leading to enhanced coverage and vastly improved connectivity.