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Auction of 5G spectrum valued at over Rs 96,000 crore commences

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In Short:

India’s private carriers Reliance Jio, Bharti Airtel, and Vodafone Idea are bidding in India’s second 5G spectrum auction. The auction includes spectrum in eight bands with a reserve price of Rs 96,238.45 crore. Analysts predict a low-key affair with bids mainly focusing on specific bands. The auction is expected to generate Rs 1,200 crore in the first year. Bidding may close in a day or run for a day-and-a-half.

Private Carriers Begin Bidding in India’s Second 5G Spectrum Auction

India‚Äôs private carriers, Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) have entered bids for India’s second 5G spectrum auction. The auction, which began on Tuesday, is aimed at enhancing existing telecom services and ensuring continuity of services. The government is committed to offering affordable, high-quality telecom services to all citizens.

Details of the Auction

The auction will witness participation from three major bidders: Bharti Airtel Limited, Vodafone Idea Ltd, and Reliance Jio Infocomm Ltd. This time, 5G spectrum in eight bands, totaling around Rs 96,238.45 crore at reserve prices, is up for sale. Unlike the previous auction, sub-GHz spectrum in the 600 MHz and 700 MHz bands are not included.

Shares of Airtel saw a 0.4% increase, reaching Rs 1,424.80, while Vi’s stock remained flat at Rs 17.26 on Tuesday. Reliance Industries, the parent company of Reliance Jio, recorded a 0.3% rise, reaching Rs 2,890.85.

Key Points of the Auction

The spectrum will be assigned for 20 years, and successful bidders can make payment in 20 equal annual installments. Spectrum acquired through this auction can be surrendered after a minimum of 10 years. There will be no Spectrum Usage Charges (SUC) for spectrum acquired in this auction.

Experts predict a subdued bidding process, with Airtel and Vi likely focusing on specific bands for spectrum renewals. Analysts believe that the auction may conclude in a day or a day and a half, with an estimated collection of Rs 1,200 crore in the first year.

Bidding Strategy

The earnest money deposits (EMDs) submitted by the telcos, ranging from Rs 300 – 3,000 crore, indicate a lowered bidding capacity this time. Reliance Jio, Airtel, and Vi submitted EMDs of Rs 3,000 crore, Rs 1,050 crore, and Rs 300 crore, respectively, for the present auction.

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