5G auction Day 1: Bids of Rs 1.45L cr; premium 700 MHz band in demand

The first day of the country’s largest ever auction of 5G spectrum saw bids of around Rs 1.45 lakh crore, including in the premium 700 MHz band, Union Minister of Communications Ashwini Vaishnaw said Tuesday. All the four applicants — Reliance Jio, Bharti Airtel, Vodafone Idea and an Adani Group subsidiary — “actively” participated in the auction, he said.

The 700 MHz band, which is best suited for coverage in high-density areas, and is ideal for data networks, had gone unsold in both the previous spectrum auctions in 2016 and 2021. The band saw bidding in all 22 circles, and, according to analysts, it received bids worth around Rs 39,000 crore.

A total of 72 GHz of spectrum is up for bidding in the ongoing auction in various high- and low-frequency bands, accounting for a total of around Rs 4.3 lakh crore. At Rs 1.45 lakh crore, the bids have exceeded expectations, surpassing the government’s internal expectations of receiving bids of around Rs 1 lakh crore.

Some of the most competitive bidding was done in Assam, Jammu & Kashmir, and Northeast circles in the 800 MHz bands, Odisha and Uttar Pradesh (East) circles in the 1800 MHz band, Bihar, Haryana, Kerala, West Bengal and Punjab circles in the 2,100 MHz band.

Vaishnaw said the auction saw healthy participation on the first day, adding the response shows that the industry has turned from its difficult times. He said the government will aim to allocate spectrum by August 14, and expects 5G services to start rolling out by September. The auction will continue on Wednesday.

As per data released by the Department of Telecommunications (DoT), four rounds of bidding took place on Tuesday with mid- and high-end bands seeing keen interest. In particular, the 3,300 MHz and 26 GHz bands, which are seen as the most suitable bands for 5G enterprise solutions, attracted strong bids, while the 600 MHz band received minimal bids.

As per the auction process, it won’t be known as to which company bagged how many airwaves until the completion of the auction. However, the applicants’ earnest money deposits (EMDs) submitted to the DoT prior to the bidding could serve as an indicator about the bands that the applicants could be looking to target.

Adani Data Networks, a subsidiary of Adani Group, which had submitted an EMD of Rs 100 crore, had earlier clarified it was participating in the auction only to provide enterprise-level private network solutions for various business verticals like airports, ports, power generation, and logistics among others. Analysts had predicted the company would largely place bids in the high frequency 3,300 MHz and 26 GHz millimetre bands.

Apart from high-speed data connectivity for users, 5G also has the potential to enable a number of enterprise-level solutions such as machine-to-machine communications, connected vehicles, and more immersive augmented reality and metaverse experiences, among others.

The auction is being held for spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz), mid (3,300 MHz) and high (26 GHz) frequency bands. The government will not collect any spectrum usage charge on airwaves auctioned in this round, and the requirement for bank and financial guarantees has been done away with.

Payments for spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning of each year. The bidders would be given an option to surrender the spectrum after 10 years, with no future liabilities with respect to balance instalments.

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