India’s biggest spectrum auction starts on 1st October

The most awaited India’s biggest spectrum auction will starts from 1st October. The companies that have qualified for the auction are Reliance Jio Infocomm, Bharti Airtel, Vodafone India, Idea Cellular, RCom, Aircel and Tata Teleservices, who have furnished total earnest money of INR 14,653 crore.

This biggest auction of telecom spectrum kicks off on Saturday with seven operators in the fray for a total of 2,354.55 MHz across seven bands, The government has fixed reserve price of INR 5.66 lakh crore (USD 85 billion). The earnest money deposit is roughly 10 per cent of what a telecom operator can bid for, experts said the expectations of INR 5.66 lakh crore (USD 8.5 billion) was already far-fetched.

Top investment banker Goldman Sachs has predicted that the total proceeds from the auction will be around USD 7 billion – less than half of USD 16 billion that was fetched in the 2015 auction and sharply below USD 85 billion if all spectrum was sold at the reserve price.

The process would be transparent and the award of airwaves quick. “One new bidding-friendly measure we have adopted this year is that spectrum won will be assigned within 30 days from the date of upfront payment.” Telecom Secretary J.S. Deepak has said Ahead of the auctions.

Interest rate on deferred payment will be 9.3 per cent this year unlike 10 per cent in 2015.

For this auctions – which will be an Internet-based, online process – the government has hired the services of ‘mjunction services’. The government said they have conducted mock auctions earlier this week went off well.

The auction timings are from 9 a.m. to 7.30 p.m., Monday to Saturday.

The 2,300-plus MHz of airwaves spectrum on the block for telecom operators are in seven bands – 700 MHz , 800 MHz, 900 MHz (B8), 1,800 MHz (B3) , 2,100 MHz (B1), 2,300 MHz (B40) and 2,500 MHz (B41).

Jio and Bharti have much wider network coverage for wireless broadband compare to Vodafone and Idea, and service provider may use the upcoming auction to plug 3G/4G gaps. Expected that Bharti and Jio to buy additional 3G and 4G spectrum to increase data capacity on their networks.