InvestorQ : What is the update on the 5G spectrum auctions that triggered off in the last week of July this year?
Rutuja Nigam made post

What is the update on the 5G spectrum auctions that triggered off in the last week of July this year?

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3 weeks ago
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On day 1 of the auctions, the total bids worth Rs1.45 trillion were received but on the second day it only went up to Rs1.49 trillion as a result of which the auctions were also extended for the third day. Here are key takeaways from the 5G spectrum auctions.

a) Out of bids worth Rs1.45 trillion received by the government after 4 rounds on Day 1, the pricey 700 MHz band saw bidding for first time. One could also see strong bidding interest in the mid-band (3.3-3.67 GHz) and high-band (26 GHz) airwaves.

b) The 3 key bidders at the auction viz. Reliance Jio, Bharti Airtel and Vodafone Idea bid for mid and high-band airwaves. This has the potential to launch services offering 10 times higher mobile internet speeds than 4G. Adani Data Network will use spectrum internally.

c) The area of interest will be the 5G spectrum bidding. A bare minimum of 10 MHz is needed for optimum 5G services. However, this band had remained unsold in the last two auctions due to high base price. The base price is now lower by 40%.

d) Auction spend would be Rs70,000 crore for Reliance Jio, Rs50,000 crore for Bharti Airtel and Rs20,000 crore for Vodafone Idea. Spectrum allocation process is expected to be completed before August 15th and this will allow the telcos to officially launch 5G services by September latest.

One this is evident from the bidding is that this is going to be a record auction for the government and that is the good news on the government revenues front where it is already quite short. The million dollar question is how these telcos will price this additional cost of 5G and how it would be packaged and sold to the Indian consumer, which has traditional been very finicky about pricing.

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