India’s 5G auctions: government and operators upbeat but not all spectrum is sold

India’s 5G auctions: government and operators upbeat but not all spectrum is sold

The Indian government has offered an upbeat initial assessment of the 5G spectrum auction that finally finished on 1 August, saying that the 71% of spectrum sold – 51.236GHz out of  72.098GHz – is good enough to cover the entire country with 5G within two or three years.

The total money raised from the auction was Rs1,50,173 crore or a little over US$19 billion. Pretty much as expected, Adani, the only new player, which is aiming to target private networks, spent Rs212 crore (just under US$29 million) to acquire 400MHz in the 26GHz band.

Of the big names, Vodafone Idea (Vi) acquired spectrum in the 3300MHz and 26GHz 5G bands and additional 4G spectrum in three telecom circles (or service areas) relating to Andhra Pradesh, Karnataka and Punjab. India’s Economic Times says that Vi’s total bid, amounting to Rs18,799 crore, (about US$2.4 billion) was roughly as expected.

Telecom market leader Reliance Jio has acquired a larger amount of spectrum – in the 700MHz, 800MHz, 1800MHz, 3300MHz and 26GHz bands – at a cost of Rs88,078 crore (some US$11.2 billion). The 700MHz band had gone unsold in the previous two auctions (2016 and 2021).

Low-band spectrum like 700MHz offers superior indoor penetration and greater range, while high-band frequencies such as 26GHz millimetre Wave (mmWave) offer huge capacity over short distances. 

The second largest telecom player, Airtel, acquired 19,800MHz spectrum for Rs43,084 crore (just under US$5.5 billion) in the 900MHz, 1800MHz, 2100MHz, 3300MHz and 26GHz bands. This included a pan-India footprint in the 3.5GHz and 26GHz bands.

All the company statements relating to the spectrum purchases were predictably upbeat, despite the loud calls for cheaper spectrum and fewer opportunities for private network specialists that preceded the auction.

And how did the government do? A number of newspapers have pointed out that the government received no bids in the 600MHz and 2300MHz bands, so, once the dust settles it will be interesting to see how more detached observers assess the results.

Still the government has earned close to US$20 billion on the sale. The winners will own their spectrum for 20 years and spectrum payments have to be made over 20 annual instalments, with interest at 7.2% per year.

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