The Department of Telecommunications (DoT) will commence the auction of ₹96,317.65 crore worth of spectrum on Tuesday.
On February 8, the Union Cabinet approved the auction of 10,523.15 megahertz (MHz) of spectrum across various bands at a reserve price of ₹96,317.65 crore, according to Business Standard.
All unsold spectrum from the previous sale will be available for bidding again, including airwaves in the 800, 900, 1800, 2100, 2300, 2500, 3300 MHz, and 26 GHz bands, covering a substantial portion of voice and data spectrum.
Reliance Jio, Bharti Airtel, and Vodafone Idea have collectively deposited ₹4,350 crore for the bidding, as announced by the DoT.
This auction is significantly smaller—five times less—than the last 5G spectrum auction in 2022, Business Standard reported.
Companies earn points based on the earnest money deposit (EMD) they have made, which allows them to bid for the number of circles and the amount of spectrum they desire. Higher points indicate a greater capability to place bids. Telcos can bid for spectrum worth up to 12 times their EMD. Due to much lower demand for spectrum and a cautious approach by market leader Reliance Jio, the auctions are expected to be more subdued, according to a recent note by IIFL Securities.
Although all unsold spectrum from the last sale is up for bidding again, the amount of spectrum available has decreased by more than seven times since 2022, Business Standard noted.
Jio (108 million) and Airtel (72 million) have seen their 5G penetration rise to about 20-22% of their subscriber bases.
Airtel plans to add at least 25,000 5G sites in Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Kerala, and West Bengal to enhance rural coverage, for which it has sufficient spectrum, as reported by Mint.
Vodafone Idea has decided not to renew some of its spectrum in West Bengal and Uttar Pradesh West, where renewals for 12 MHz in the 1800 MHz and 900 MHz bands were due. This decision will reduce its renewal expenditure from ₹1,500 crore to ₹200 crore for just the 900 MHz band, according to Mint.
While the government had expected to generate about ₹10,000 crore from the sale, various brokerage reports leading up to the auction on June 25 suggest that the auctions may bring in anywhere between ₹4,000 crore and ₹16,600 crore.
