Mumbai: Ever since initiating the sale of the fifth generation (5G) spectrum for the first time in 2017, the government has finally sold the 5G spectrum for Rs 1.5 lakh crore — way below the projected Rs 4.3 lakh crore but far ahead of the previous attempts.
The recent spectrum bids are successful in many ways as in 2017, the proposed sale of 5G airwaves in 3000 MHz bands and previously unsold 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, and 2500 megahertz (MHz) bands couldn’t take place despite TRAI’s consultation with stakeholders as the struggling telcos demanded to push back the spectrum sale.
In 2018, telecom regulator, TRAI, recommended the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, and 3300-3600 MHz bands to be auctioned as 5G bands, but the telcos felt that the reserve price for 5G bands especially the 700 MHz band was too high.
In December 2019, the Digital Communications Commission (DCC) decided to maintain the reserve prices at Rs 5.2 lakh crore for the auction of the 8,300 MHz spectrum in 2020 despite the unfavourable Supreme Court’s ruling against the telcos in the Adjusted Gross Revenue (AGR) case.
Relief For Telcos
The bleeding telcos were given relief by the government for staggered payment of their AGR dues as the government knew that shutting down of debt-laden Vodafone Idea will send the wrong signal to the international investors and debt-laden telcos such as Bharti Airtel and Vodafone Idea will not be able to bid in the upcoming 5G spectrum sale.
‘Industry Is In Expansionary Mode’
Finally, after giving relief to the telecom companies, the government launched 5G spectrum bids in March last year and was able to sell just 37 per cent of the total spectrum up for grabs, mopping up Rs 77,815 crore. However, the government failed to get any bids for the spectrum in the 700 MHz and 2500 MHz bands as even cash-rich telco like Reliance Jio felt that the reserve price was too high.
The success of this week’s spectrum sale besides getting almost double bids worth Rs 1.5 lakh crore, the government was able to get bids for the most coveted 700 MHz spectrum for the first time.
UBS believes that the recently concluded spectrum auctions with 51GHz of the spectrum, or 71 per cent of the total 72 GHz airwaves sold in 22 telecom circles for a total of Rs 1.5 lakh crore ($19 billion) was more aggressive than expected.
“While we can understand operators’ strategy of acquiring pan-India 3300MHz rather than staggered purchase over 2-3 years, we are surprised at Jio’s acquisition of 10MHz spectrum in the expensive 700MHz band and that too for pan-Indian,” said UBS in a note to its clients.
“The successful auction of 5G spectrum is a growth sign for the country’s telecom sector. The significant amount of auction indicates that the industry is in expansionary mode and entering a new growth orbit,” Pradeep Multani, president, PHD Chamber, told ABP Live.