The auctions will enable companies such as Airtel, Vodafone Idea and market leader Reliance Jio to augment their telecom holdings. They will also buy back replacement spectrum for certain airwaves, the term of which is ending soon.
The Union Cabinet had given an approval to the muchawaited sale in December last year and the cash-strapped government — battling fund shortage and a widening fiscal deficit on Covid relief measures — would be hoping to mop up funds for the exchequer through the process.
Telecom companies, however, have made it clear that their bidding may not be that enthusiastic as they remain financially challenged and would mainly look at filing gaps in their spectrum holdings. Many analysts have raised doubts about the sale in the 700MHz band, which they say is lucrative for deployment, “but remains expensive” (it remained unsold in the previous round in 2016).
On its part, the government had tried to add some excitement to the sale by allowing companies to make changes to technology advancements and upgrades with a notice of only six months, thus enabling them to launch 5G services (with limited capabilities) on the existing airwaves. This would mean that companies which top up sufficient amount of airwaves can launch 5G services even prior to the sale of the specialised spectrum earmarked for the high-speed mobile services.
Airtel has already showcased a limited 5G launch on existing airwaves in Hyderabad in late January and said it is awaiting a nod by the telecom department to launch it commercially. Reliance Jio, Bharti Airtel and Vodafone Idea have submitted a total earnest money deposit (EMD) of Rs 13,475 crore for the auctions, the telecom ministry said earlier this month.
Industry body COAI said the auction will help address the requirement for more spectrum in view of growing consumer usage. “… lower reserve prices would have provided additional resources for network expansion to the telcos”, the industry lobby group said.