India's ₹96,000 crore 5G spectrum auction postponed to June 25
India's much-awaited 5G spectrum auction, a key event in the telecom sector, has been postponed for the second time and is now slated for June 25. The Department of Telecommunications (DoT) made changes to the Notice Inviting Applications (NIA), thereby delaying the sale by an additional 19 days. This decision was taken as India awaits the formation of its next government after general election results.
Mock auctions scheduled ahead of 5G spectrum sale
The DoT's official notification has announced that mock auctions will be conducted on June 13 and 14, ahead of the actual spectrum sale. The auction was initially scheduled for May 20 but was first deferred to June 6 due to the general elections. This marks the second delay in the much-anticipated telecom event.
5G airwaves in 8 bands to be auctioned
The upcoming auction will feature 5G airwaves in eight bands — the 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz, 2,500MHz, 3.3GHz and 26GHz bands. The base price for these airwaves is over ₹96,000 crore. However, analysts predict a subdued bidding process as major telecom players like Reliance Jio, Bharti Airtel and Vodafone Idea already hold adequate spectrum and consumer-centric use cases for widespread 5G penetration remain scarce.
Government expected to collect modest revenue from auction
Industry experts estimate that the government is likely to collect a modest ₹1,200 crore in the first year from this sale. It is expected that Airtel, Jio and Vi will collectively purchase only around ₹12,500 crore of 5G airwaves. This represents approximately just about 13% of the total spectrum worth ₹96,320 crore on offer. The earnest money deposits (EMDs) submitted by India's top telcos reflect these subdued expectations.
Telcos's EMD lowest since the 2014 auction sale
The EMDs submitted by India's top telcos, which indicate a company's bidding strategy and spectrum buying capacity, range from ₹300-3,000 crore. This marks the lowest since the 2014 sale and is nearly 79-86% lower than the submissions in the previous 5G auction of 2022. Reliance Jio has deposited the highest earnest money of ₹3,000 crore for the spectrum auction, followed by Bharti Airtel with an EMD of ₹1,050 crore and Vodafone Idea with ₹300 crore.
