Bidding for spectrum, including 5G airwaves, to begin this week

Reliance Jio, Adani Data Networks, Bharti Airtel and Vodafone Idea to participate in the auction set to begin on July 26, at which analysts do not foresee any aggressive bidding due to the abundancy of spectrum and the limited number of participants

The much-awaited auction for telecom spectrum, including for 5G airwaves, will begin this week from Tuesday. However, analysts do not anticipate aggressive bidding, given sufficient availability of spectrum and limited participants.

A total of 72,097.85 MHz (or 72 Ghz) of spectrum with a validity period of 20 years will be put on the block during the auctions that are to begin on July 26. Airwaves across Low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz) and High (26 GHz) frequency bands, worth at least ₹4,316 billion ($56 billion) will be put up for bidding.

It is expected that the Mid and High band spectrum will be utilised by telecom service providers to roll-out 5G services, wherein speeds would be 10 times higher than what is possible through the current 4G services.

“Given enough availability of spectrum, any sharp aggression or bidding higher than the reserve price appears unlikely. The highest amount of spectrum available per player for 5G bands on a pan-India basis would be worth ₹489 billion ($6.1 billion). Assuming both Reliance Jio and Bharti Airtel bid to the maximum extent allowed, there would still be enough spectrum left to satisfy the maximum amount that the other two players can bid,” Morgan Stanley said in a recent note.

Likewise, Motilal Oswal noted that there is no risk of overbidding as unlike previous auctions, there is abundant spectrum, limited participants and a cap on spectrum bidding to limit the bidding space to three-to-four sizeable players across 5G bands (700MHz, 3300MHz, and 26GHz).

“Given enough availability of spectrum, any sharp aggression or bidding higher than the reserve price appears unlikely. The highest amount of spectrum available per player for 5G bands on a pan-India basis would be worth ₹489 billion ($6.1 billion). Assuming both Reliance Jio and Bharti Airtel bid to the maximum extent allowed, there would still be enough spectrum left to satisfy the maximum amount that the other two players can bid”Morgan Stanley

Four bidders will be participating in the upcoming auction – Reliance Jio, Adani Data Networks, Bharti Airtel and Vodafone Idea. As per official data, while Reliance Jio has made a ₹14,000-crore earnest money deposit (EMD), the deposit amount for Adani Data Network stood at a modest ₹100 crore, for Bharti Airtel at ₹5,500 crore and for Vodafone Idea at ₹2,200 crore.