Spectrum Auction: Day 1 Bid Received Worth 77,146 Crores: All You Should Know

Spectrum Auction

The government is quite happy after receiving bids worth Rs 77,146 crore on the very first day of Spectrum auction, as it was initially estimated that this time the auction could go up to 12-13 thousand crore. The spectrum auction is expected to be completed today ie on Tuesday.

Despite the Corona pandemic, there was tremendous enthusiasm among the telecom companies regarding spectrum auction. In the process started from Monday, the auction of spectrum worth Rs 77,146 crore was auctioned on the very first day. The auction is expected to close on Tuesday. Let me tell you that Spectrum Neelmi is happening after 5 years and it has been bid on behalf of all the telecom companies Reiance Jio, Bharti Airtel and Vodafone Idea. Before the spectrum auction, the government had estimated that the bid could go up to Rs 45,000 crore. The government is estimated to get 12-13 thousand crores from this auction.

Spectrum Auction

In the auction, the winning companies are given a spectrum for 20 years. Vodafone Idea, Reliance Jio, and Bharatiya Airtel are the only three companies that have participated in the spectrum auction. Earlier, in the spectrum auction held in the year 2016, seven companies had bid in the auction. Telecom Minister Ravi Shankar Prasad said that this spectrum auction is being done mainly keeping in mind the expansion of 4G service. With this spectrum auction, customers will get better services than before.

No bids were found in the 700 and 2500 MHz bands

Minister Ravi Shankar Prasad said that 700, 800, 900, 1800, 2100, 2300, and 2500 MHz bands were included in the auction. But none of the companies in the auction made any bids for the 700 and 2500 MHz bands. The value of the spectrum put up for bid is estimated to be around four lakh crore rupees. Of these, the 700 MHz spectrum alone is worth Rs 1.97 lakh crore. This spectrum is mainly for 5G. It is expected that 700 MHz will be included in the auction of spectrum for 5G. Significantly, in the year 2016 also no company had bid for 700 MHz.

Spectrum Auction

What is expected in the spectrum auction?

Most experts believe that in the absence of 5G airwaves in the auction, the auction will will remain a subdued affair. As per the Economic Times report, of the three private telecom operators, Mukesh Ambani-led Reliance Jio Infocomm has made an earnest money deposit of Rs 10,000 crore, while Bharti Airtel and Vodafone Idea have deposited Rs 3,000 crore and Rs 475 crore respectively.

This amount is important as it signals at the bidding strategy opted by a telecom company during the spectrum auction. Also, the higher earnest money deposited helps the telecom company achieve higher eligibility points, giving it the freedom to bid on more airwaves in different service areas, provided the spectrum in that area is available.

As per an online report, Credit Suisse has said that Reliance Jio may renew the 44 MHz spectrum bought from Reliance Communication, but also acquire additional spectrum in the 55 MHz spectrum owned by the latter in this auction.

Spectrum Auction

When will the spectrum auction end?

With three big private players in the race, the final results are likely to be out within a day or two. Also, along with these private companies, new companies, including foreign companies have been made eligible to bid for these airwaves. In that case, foreign companies need to have to either set up a branch in India and register as an Indian company or have a tie-up with an Indian company in order to retain the airwaves after winning the auction.

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Lingraj Sahu
Lingraj is one of the youngest members of PhoneTalk, and a recent tech geek convert. When he's not churning out articles, you’ll find him watching sports, exploring new places, and listening to music.