What were the key highlights of the recent telecom spectrum auctions conducted by the Indian government?

Here are some of the key highlights of the telecom spectrum auctions completed in the previous week between 01 March and 02 March.

· On 02 March, the Indian government completed its 2-day auction of telecom spectrum with a basic reserve price target of Rs.392,000 crore.

· However, against the target the government could only collect Rs.77,184 crore or less than 20% of the target original target.

· The two of the most premium bands in the auction of 700 MHz and 2500 MHz did not get any response with all the auctions focused only on the lower bands.

· The 700 MHz and 2500 MHz bands are the key to the launch of 5G but most companies were not interested as it would entail higher investments at this juncture.

· In fact, the government had tried to auction the 700 MHz band in the 2016 auction also but even at that time it found no buyers and that situation has not changed.

· The biggest demand came for the 800 MHz band that saw 65% absorption. The other bands that saw good demand traction were the 900 MHz and the 1800 MHz bands.

· Out of Rs.77,184 crore worth of spectrum auctioned in the week, Jio got the lion’s share worth Rs.57,000 crore across 22 circles.

· Bharti was the second largest beneficiary with spectrum to the tune of Rs.18,000 crore allotted at the spectrum auctions. Vodafone got less than Rs.2000 crore of spectrum.

· The lower-than-expected auction collections could disappoint the government as it would put them behind in the upfront spectrum fees projected to fill the budget gap

· The upfront charges are 25% for lower bands and 50% for higher bands, so the government will earn about Rs.27,000 crore as upfront payment and Rs.20,000 crore in the current year.