5G: All spectrum might not get bought; govt stares at shortfall

The Department of Telecommunications (DoT) is anticipating to mop up between Rs 80,000 crore to Rs 1 lakh crore from the upcoming 5G public sale, a senior authorities official has mentioned. All the spectrum up for public sale, price round Rs 4 lakh crore, is probably not bought, together with within the premium 700 MHz spectrum band, the official mentioned.

The public sale, to be held on July 26, will likely be held for spectrum within the frequencies of 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 3,300 MHz and 26 GHz bands. “While we have put up all the spectrum for auction, we do not expect telcos to bid for all of it. We are expecting to receive bids worth Rs 80,000 crore to Rs 1 lakh crore. For example, the 700 MHz band may not have as much demand,” the official mentioned.

The authorities’s estimates are consistent with predictions made by analysts.

A report by IIFL Securities mentioned that the public sale might even see bids price Rs 71,000 crore. “While supply is abundant, the government has not cut TRAI’s proposed reserve prices despite telcos’ assertion that these were still high. We see telcos bidding only for 4 of the 10 bands and spectrum should be sold at the base price. We estimate spectrum outlay of Rs 37,500 crore, Rs 25,000 crore and Rs 8,500 crore for Jio, Bharti and Vi,” mentioned IIFL in its report.

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The authorities has saved the reserve value of 5G airwaves unchanged, in keeping with the Notice Inviting Application (NIA) issued by the DoT.

Telecom operators had requested for a discount of round 90 per cent within the reserve value of airwaves from the 2018 ranges. But the Cabinet’s closing approval features a value discount of round 35-40 per cent, consistent with the Telecom Regulatory Authority of India’s (Trai) suggestions.

Specifically, the regulatory physique had urged that the bottom value for prime 5G band of three,300-3,670 MHz be saved at Rs 317 crore per MHz — 35 per cent decrease than the bottom value of Rs 492 crore per MHz introduced in 2018. Similarly, for the 700 MHz, the worth really useful by Trai comes out to Rs 3,297 crore, which is sort of 40 per cent decrease than costs really useful in 2018.