The forthcoming spectrum auctions are anticipated to generate between $0.5 billion and $2 billion for the government, translating to approximately ₹16,600 crore. Telecom companies are expected to participate actively to enhance capacity in specific bands or circles and renew expiring spectrum, particularly in the 800, 900, 1800, and 2300 MHz bands.
Airtel Expected to Lead Spending:
Analysts predict that Bharti Airtel will take the lead in spending, ranging from $0.5 billion to $1.5 billion. Vodafone Idea and Reliance Jio are likely to exhibit limited participation, with Vodafone Idea focusing on spectrum renewals in two circles and Reliance Jio looking to add spectrum in specific bands.
Renewals and Strategic Investments:
Bharti Airtel’s renewals for 42MHz of spectrum in 1800MHz and 900MHz bands across six circles could result in spending of ₹38 billion ($500 million). Additionally, Airtel may bid in certain circles to strengthen its holdings in 800MHz/1800MHz bands and 2300MHz band, potentially leading to a maximum spend of ₹123 billion ($1.5 billion).
Vodafone Idea has renewals for 12MHz in the 1800MHz and 900MHz bands in West Bengal and UP West. The estimated spending at reserve prices could be ₹1,500 crore, but strategic decisions may reduce this figure, especially in the 1800MHz band.
Reliance Jio, having secured 5G spectrum across various bands, may focus on increasing its spectrum holdings in specific circles within the 800MHz band, resulting in a potential spending of about ₹3,700 crore.
Government’s Spectrum Auction Expectations:
Analysts anticipate that around 17% of the spectrum value will be sold in this auction, marking one of the lowest percentages since 2014. Spectrum base prices have seen increases ranging from 8.9% to 14% in bands or circles that witnessed demand in the 2022 auctions.
Reserve Prices and Auction Dynamics:
The Telecom Regulatory Authority of India (TRAI) recommended reserve prices have increased by 12% in the mid-band (3300 MHz) and 10-20% in the high-frequency band (26 GHz) compared to the 2022 spectrum auctions.
Despite the price hikes, no competitive bidding is expected, indicating that spectrum may be sold close to reserve prices. The auctions are projected to conclude in a couple of days, following the government’s anticipation of a subdued affair.
