The government has received bids worth Rs 1.45 trillion after four rounds on the first day of 5G spectrum auction. The event witnessed 700 MHz band being bid for the first time. The telcos showed stronger interest in the mid-band (3.3-3.67 GHz) and high-band (26 GHz) airwaves. Meanwhile, Adani Data Networks is expected to have put in bids only for the high band for use in its captive networks.
The spectrum bands on offer include low-band airwaves (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz), mid-band or C-band (3.3-3.67 GHz), and high band (26 GHz). In the ongoing 5G auction, the government has offered 72 GHz of airwaves for 20 years across 10 5G bands worth Rs 4.3 trillion at reserve prices. However, for an operator to offer optimum 5G services on the band, a minimum 10 MHz is needed. The band had gone unsold in the last two auctions, owing high base price. In order to attract interest of the bidders, the government has cut the rate by 40 per cent to Rs 39.27 billion for a unit.
According to the data by the Department of Telecommunications (DoT), all bids, including some minor bidding for bands such as 900 MHz, 1800 MHz, 2100 MHz and 2500 MHz, came in at the base price owing to the ample spectrum on offer. Meanwhile, the 600 MHz, on offer for the first time, 800 MHz and 2300 MHz bands did not attract any bids on the first day.
Addressing a press briefing, Ashwini Vaishnaw, Union Minister of Communications, Electronics and Information Technology, informed that the four rounds of spectrum auction witnessed healthy participation by the telcos. The minister also mentioned that the spectrum allocation process is expected to be completed by August 15, 2022 and the 5G service launch by September-October, 2022. Meanwhile, with regard to tariff for 5G services, the minister noted that the rates would be decided by the industry. However, going with the market trends, the telcos are expected to offer 5G services at a premium of 10-15 per cent initially, before bringing them on par with 4G services over time as adoption widens.
Industry reactions:
Commenting on the auction proceedings, Peeyush Vaish, Partner and Telecom Sector Leader, Deloitte India, said, “After round 4, bids have been placed for 40 per cent of the spectrum available which is in line with the expectations. Apart from the mid band (3300 Mhz) and the mm wave (26Ghz) required for 5G roll-out, the 700 Mhz has been sought after to catapult the rural broadband penetration in the country. The operators have also exercised caution in bidding for the other sub 1 Ghz spectrum bands apart from some bids in the coveted 900 Mhz band in Assam and J&K. 5G monetisation will unfurl over time and hence, operators are preferring to stay away from blocking funds on larger blocks of spectrum at this stage.”
Meanwhile, Mahendra Nahata, managing director, Himachal Futuristic Communications Limited (HFCL), said, “With 5G spectrum auctions becoming a success, we are excited about the 5G rollout becoming a reality soon and the vast opportunity that will unfold for Indian enterprises and consumers. The launch of the 5G network will enable telecom operators to start providing a new generation of high bandwidth services to customers. 5G will allow enterprises to embark on the Industry 4.0 journey, and it will help accelerate digital transformation across industries spanning manufacturing, retail, utilities, smart cities and more. The 5G revolution would contribute significantly in achieving our honourable PM’s vision of India becoming a $5 trillion economy, and it will aid in bridging the digital divide — thus making various services like healthcare, education, financial services, e-commerce and entertainment accessible to the bottom of the pyramid. HFCL has been on a transformation journey to become a leading high-tech enterprise and integrated next-gen communication product provider, with 5G being a key focus area. As we move forward, we are entering into a multi-year upcycle for telecom and network implementation. We are optimistic that our investments in 5G will further enable us to tap into the massive opportunity in India and key global markets. As one of India’s leading telecom equipment and optical fibre cables manufacturer, 5G rollout will open up the opportunity to offer our clients more end-to-end solutions with open source technology. We are already seeing strong demand for our products and integrated network solutions and plan to further leverage our capabilities to tap new products, new customers and new geographies.”
