This auction is anticipated to be more subdued compared to the one held in 2022, which generated approximately Rs 1.5 lakh crore and involved the sale of 72,097.85 MHz of airwaves.
In a significant move for India’s telecom sector, Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) have collectively raised Rs 4,350 crore for the upcoming spectrum auction. Although this auction is expected to be less aggressive than the record-breaking 2022 auction, it is important for the continued expansion and growth of India’s telecom infrastructure.
Deposit Details and Telco Contribution
Reliance Jio has once again demonstrated its market dominance by accumulating Rs 3,000 crore, the largest contribution among the three telcos. Bharti Airtel came second with deposits of Rs 1,050 crore and Vodafone Idea (Vi) contributed Rs 300 crore. These figures have been disclosed by the Department of Telecommunications (DoT).
Spectrum Band and Auction Price
DoT will make available a variety of spectrum bands in this auction, including 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz. The total value of these bands has been estimated at Rs 96,317.65 crore. This diverse range of spectrum is important for telecommunications companies to enhance their network capabilities and support future technological advancements.
Comparative analysis with 2022 auction
The upcoming auction is expected to be slower than the 2022 spectrum auction, which generated about Rs 1.5 lakh crore and saw the sale of 72,097.85 MHz of airwaves. This year the government hopes to raise around Rs 10,000 crore. Analysts suggest the low expectations stem from telcos’ existing spectrum holdings and their strategic focus on selective investments.
Strategic steps by telecom companies
Airtel and Vi are likely to focus their expenses on spectrum renewal in circles where their existing licenses are about to expire. This view is in line with Airtel CEO Gopal Vittal’s statement about low spending in this auction. Additionally, there will be no Spectrum Usage Charges (SUC) on the newly acquired spectrum, which will provide some financial relief to the telecom companies.
5G deployment and future prospects
With sufficient 5G airwaves already secured, telcos are not expected to invest heavily in additional 5G spectrum during this auction. The return on investment for 5G is still uncertain, and operators are focusing on expanding their existing 5G infrastructure to more areas.
Vodafone Idea is also taking steps to increase its 4G capacity by refarming 3G spectrum in various circles. The strategy aims to improve 4G coverage and support better service quality.
Jio’s strategy and market implications
The eyes of the industry are fixed on the stand of Reliance Jio in the upcoming auction. Jio’s strategy will likely influence market dynamics and reveal its long-term plans. The company’s substantial deposits underline its aggressive stance in maintaining and expanding its market leadership.
As the spectrum auction approaches, the submissions from Jio, Airtel and Vi set the stage for strategic bidding and future network enhancements. While this auction may not reach the financial heights of 2022, it remains a significant event for the telecom sector, which will shape the next phase of digital connectivity in India.
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