Spectrum auction ends on Day 2 with total Rs 11,340 cr bids, officials say

Volume limited as large part of spectrum already auctioned, says Scindia

The latest round of telecom spectrum auction, mainly to power 5G services, turned out to be among the shortest, ending on the second day of bidding. The government mopped up Rs 11,340.8 crore during the two-day auction that concluded on Wednesday, officials said.

The muted bidding for airwaves resulted in only 1.34 per cent of the spectrum put up for sale being bought. Of the 10,523 MHz of spectrum on offer at a reserve price of Rs 96,317.65 crore, telcos picked up only 141 MHz.
 

In the 2024 Interim Budget, the government had given a Rs 1.2 trillion non-tax revenue collection estimate from the telecom sector for FY25. This was 28.5 per cent higher than the Rs 93,540 crore FY24 revised estimate. Considering that telcos will make the payment for the purchased spectrum over the next 20 years, it’s not immediately clear whether the gamut of proceeds from the latest sale will affect the target, according to an official.
 

 

Bharti Airtel topped the buyers’ list, with bids worth Rs 6,856 crore. The Sunil Mittal-led telco purchased 97 MHz of spectrum. Telecom market leader Reliance Jio bought the lowest amount of spectrum (14.4 MHz) at Rs 973 crore. Vodafone Idea (Vi) picked up the second-largest amount of spectrum (30 MHz) at Rs 3,510.4 crore. A large chunk of the purchases by both Bharti Airtel and Vodafone Idea was towards renewal of spectrum in certain bands.

 

Mukesh Ambani-promoted Jio has no spectrum renewals in 2024. According to sources, of the Rs 11,341 crore worth of spectrum sold, about Rs 6,000 crore was spent by telcos for acquiring new spectrum, while the rest was for renewals.

The previous round of spectrum auction ahead of the launch of 5G services in 2022, had seen telcos bidding aggressively. They had bought airwaves worth a record Rs 1.5 trillion at that point. This time, telcos’ tepid response on the second day of bidding prompted officials to close the auctions after the seventh round.
 

“Spectrum auction 2024 was part of a continuous allocation process that is transparent, robust and progressive. Telecom service providers have taken spectrum not only for continuity of service but for expanding their services,” Telecom Minister Jyotiraditya Scindia said. The volume is limited because already a large part of the spectrum required was

auctioned recently, he said. 
 

“We will continue the process with the clear objective of ensuring reliability and growth of telecom services in India,” the minister added.

Telcos bought spectrum across four of the eight bands on offer — 900MHz, 1,800MHz, 2,100MHz, and 2,500MHz, data released by the department of telecommunications (DoT) showed. Meanwhile, the 800MHz, 2,300MHz, 3,300MHz and 26GHz bands found no takers. Telcos gave the last two of these bands, considered ideal for 5G signals, a miss.

While Airtel was widely tipped to become the largest spender at the latest auctions, according to most analysts, the telco spent much more than Rs 3,800 crore that multiple brokerage houses had predicted.

The 1,800MHz band saw among the highest demand from all telcos; this was the only band where Jio acquired spectrum.
According to an analyst report by Morgan Stanley released on Wednesday, Vi and Airtel controlled 31 per cent and 29 per cent of the 1,800MHz spectrum market share, respectively, before the auction. The band saw competition among telcos above the government's reserve price in the West Bengal and Bihar circles, officials said.

Jio's spectrum footprint has increased to 26,801 MHz (uplink + downlink), solidifying its leadership position, the analyst report said on Wednesday. “This new spectrum acquisition will continue to enable us to serve aspirations of the new India, in terms of growing traffic demands and superior customer experience, which is no longer limited to only urban markets,” Reliance Jio Infocomm Chairman Akash M Ambani said.

Telcos gave the 800MHz band a miss. This was mostly the unsold spectrum from the 2022 auction.

Airtel and Vi circled on the 900MHz band for renewals. Airtel bought the most spectrum at 42 MHz in the band, owing to upcoming renewals worth Rs 4,200 crore the company faces. “In this auction, we bolstered our sub-GHz and mid-band holding, which will significantly boost our coverage, especially indoors,” MD & CEO Gopal Vittal said.

Vi picked up 18.8 MHz in Andhra Pradesh, Tamil Nadu, Punjab and large parts of Karnataka and Uttar Pradesh (East), 4G on sub-900GHz band will be offered for the first time, the company said. "Company already holds sufficient and competitive 5G spectrum in its 17 priority circles. In addition, 1800MHz spectrum has been acquired in Madhya Pradesh and 2500MHz spectrum in Bihar, which will help in increasing the network capacity quickly,” Vi said in a statement.

The three private-sector telecom operators had collectively put up Rs 4,350 crore as earnest money deposit for the bidding.