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Tuesday, July 23, 2024

Telcos bid Rs 11,000 crore for 5G in India’s second spectrum sale

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In Short:

The government received bids of Rs 11,000 crore in the first day of India’s 5G spectrum sale, with private carriers bidding for sub-GHz and mid-band airwaves. The auction includes 10.5 GHz of spectrum in eight bands, excluding sub-GHz bands this time. Analysts expect Airtel, Jio, and Vi to collectively buy only around Rs 12,500 crore of 5G airwaves. Bidding was muted on Day 1, reflected in low earnest money deposits.

Government Receives Bids of Rs 11,000 Crore on Day 1 of 5G Spectrum Sale

The government has received bids of Rs 11,000 crore after five rounds on Day 1 of India’s second 5G spectrum sale, with the activity level reaching 90%, according to sources. The auction will resume Wednesday morning.

Key Players Bidding for Sub-GHz and Mid-Band Airwaves

All three private carriers – Reliance Jio, Bharti Airtel, and Vodafone Idea – are believed to have bid for sub-GHz (900 MHz) and select mid-band airwaves (1800 MHz, 2100 MHz) to strengthen their 5G spectrum holdings. High-band 5G airwaves in the 26 GHz band were not bid upon on the opening day of the auction.

Details of the Auction

In this year’s auction, the government has put 10.5 GHz of 5G spectrum in eight bands worth around Rs 96,238.45 crore at reserve prices. Unlike the previous auction, sub-GHz spectrum in the 600 MHz and 700 MHz bands are not on offer this time. Spectrum will be assigned for 20 years, and successful bidders will have the option to make payments in 20 equal annual instalments.

Bidding Strategy and Spectrum Buying Capacity

Industry analysts predict that Airtel, Jio, and Vi will collectively buy only around Rs 12,500 crore of 5G airwaves. Bidding was muted on Day 1 as reflected in the modest earnest money deposits submitted by the telcos. EMDs indicate a telco’s bidding strategy and spectrum buying capacity.

Stock Performance

Shares of Airtel and Vi closed lower on Tuesday, while shares of Reliance Industries closed higher on the exchange.

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