Telecom Spectrum Auction 2021: Rs 3.92 Lakh Crore Worth Airwaves On The Block As Auction Starts Today, Things To Know

Telecom Spectrum Sale: The auction will see a total of 2,251 MHz spectrum in seven bands ranging from 700 MHz to 2500 MHz to be auctioned. However, the airwaves for 5G won’t be auctioned this time.

Telecom Spectrum Sale 2021: One of the most awaited spectrum auction is set to begin on Monday with the three major telecom operators -Reliance Jio, Bharti Airtel vying to get a share of 4G waves.

What is the spectrum auction all about?

This particular spectrum auction is also known as renewing spectrum sale because three major telcos have to renew their spectrum that will expire from July 2021. As per the Economic Times report, Jio has to renew crucial 800MHz which will be expiring in July 2021 in order to continue with uninterrupted business continuity.

Bharti Airtel and Vodafone Idea Ltd (VIL) will have spectrum expiring mostly in the 1800 MHz band (less expensive relatively) across eight circles each from July, according to Axis Capital. However, there are backup airwaves in most service areas for the companies. Among other telecom participants, Jio is seen as the most aggressive company as it aims to touch the 900 Mhz band in its ambition to roll out 5G services.

What are the spectrums for sale?

700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz frequency bands. The airwaves will be put up for bidding at a base price of Rs 3.92, the government had said. However, the 5G airwaves have not been put up for bidding.

What is the significance of this sale?

The 4G spectrum auction starting this month will set the benchmark for the minimum price of 5G radio airwaves anticipated to be sold later this year, as per the Mint report.

The sixth round of bidding for the spectrum auction will witness the auction for radio waves worth Rs 3.92 lakh crore. In December 2020, the government had approved a proposal for the auction of 2,251.25 Megahertz (MHz) of spectrum worth Rs 3.92 lakh crore at the reserve price. The government is looking at several things from obtaining a market-determined price for spectrum, besides efficient use spectrum and solving hoarding issues, the auction aims to push competition in the sector and maximizing revenue proceeds.

How it will aid companies?

As per the government official release, telcos by winning the right to use spectrum through the auction will be able in a better position to augment their network capacity whereas fresh players will be able to commence services.

However, as per the Mint report, the present auction may end up like 2016 sale, when huge chunks of airwaves remain unsold due to the high reserve price, and there were no takers for spectrum in the 700MHz and 900MHz bands. Of the targeted ₹5.63 trillion in the October 2016 auction, the government only managed to raise only ₹65,789 crore.