The much-anticipated 5G telecom spectrum auctions began on Tuesday, with the government receiving bids totaling around 1.45 lakh crore in four rounds of bidding on the first day, breaking the previous record of 1.09 lakh crore set in the 2015 auction.
The government has put up for auction 72 GHz (gigahertz) of radiowaves worth at least 4.3 lakh crore.
“By now four rounds have been completed and revenue expected from this is approximately ₹1.45-lakh crore. This is a record revenue collection… the previous record was ₹1.09-lakh crore. This is a very encouraging response and this much response for 5G clearly shows that the industry has turned from its difficult time caused by lots of litigations and other things. Now, at least it is turning into a sunrise industry,” Ashwini Vaishnaw, Minister of Communications and Information Technology, told reporters.
He stated that telecom service providers (TSPs) can now focus on investments, creating more jobs, improving service quality, and ensuring that the country’s goal of bringing ‘Digital India’ and telecom services to the last person in society in the most difficult areas is met. He stated that telecom service providers (TSPs) can now focus on investments, creating more jobs, improving service quality, and ensuring that the country’s goal of bringing ‘Digital India’ and telecom services to the last person in society in the most difficult areas is met.
Billionaire Mukesh Ambani’s Reliance Jio, Sunil Mittal’s Bharti Airtel, Vodafone Idea, and a unit of Gautam Adani’s Adani Enterprises are competing for 5G spectrum, which offers 10 times the speed of 4G, lag-free connectivity, and the ability for billions of connected devices to share data in real-time.
The auction is for spectrum in low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), medium (3300 MHz), and high (26 GHz) frequency bands.
“All four participants actively participated in the auction. Allocation of the spectrum will start in record time and the target is to complete the entire process before August 14. The start of the services will be immediately after that and we should see commercial services by September-October,” Vaishnaw said, adding that the government was expecting bids of ₹80,000-90,000 crore on the first day.
The 700 MHz band, which saw no bidding in the previous two auctions (2016 and 2021), saw active participation this time, with sources estimating that around 40% of the total spectrum on sale was bid on the first day.
The auction will continue on Wednesday, and Vaishnaw believes it will be completed “most likely” on the second day.
He mentioned that one advantage of the country is that the entire 5G stack is now ready, manufactured in India with end-to-end technology.“The Prime Minister’s vision is that we should have good capabilities in 4G services, and should be even better going into 6G. They should be used not only in India but also exported,” he said.
When asked if the era of Chinese equipment players (such as Huawei and ZTE) was coming to an end, Vaishnaw said, “Yes,” because there is no new tender of equipment to Chinese vendors for security’ reasons.
According to analysts, the industry participated at 90% on the first day; the auction will continue to see more bidding in bands such as 2300 MHz on Wednesday.
“The first day of spectrum auction is in line with expectation, particularly for 3300 MHz and 26 GHz bands. It clearly highlights that the coveted 5G spectrum is much in demand. Bidding in the 700 MHz band was surprising considering the spectrum price.
However, it reflects the need for pan-India coverage, particularly in rural areas,” said Prashant Singhal, Global TMT (Technology, Media, and Telecom) Emerging Markets Leader at EY.
There is no oversupply in any of the bands. If the current trend continues, bidding will be over as soon as 100% activity is reached. He added that the auction is likely to see higher-than-expected bidding.