India’s second 5G spectrum auction fizzles at US$1.35b

India’s second 5G spectrum auction fizzles at US$1.35b

India’s Department of Telecommunication (DoT) wrapped up its second 5G spectrum auction on Wednesday, selling 141.4 MHz of spectrum for just Rs113.4 billion (US$1.35 billion), a tenth of the value of the total spectrum on offer and its lowest auction result in recent years.

The auction, which went for seven rounds, took place on Tuesday and Wednesday after being postponed twice from its original date of May 20. Around 10,523 MHz of spectrum in the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz bands were up for grabs, worth a potential INR963.1 billion (US$11.3 billion).

However, in the end, India’s three private telcos eschewed the 5G bands mainly in favor of renewing spectrum licences set to expire and beefing up their mid-band spectrum pool.

Bharti Airtel was the biggest spender, acquiring 97 MHz spectrum in the 900 MHz, 1800 MHz and 2100 MHz bands for Rs 68.57 billion. That amount includes INR10 billion spent by its subsidiary Bharti Hexacom to acquire 15 MHz of spectrum.

Airtel MD and CEO Gopal Vittal said the telco focused its purchases on spectrum that was expiring this year, as well as new mid-band spectrum to enhance its mid-band holdings in select circles for 4G and 5G services.

“In this auction, we have bolstered our sub-giga hertz and mid-band holding which will significantly improve our coverage especially indoor,” he said in a statement.

Meanwhile, Vodafone Idea spent INR35.1 billion for 50MHz of spectrum in the 900 MHz, 1800 MHz and 2500 MHz bands.

That includes renewal of 900 MHz spectrum in two circles, and extra 900 MHz spectrum in seven circles, which will be used to provide extra capacity for its 4G network, especially for indoor coverage.

According to ETTelecom, this also means that Vodafone Idea will be able to offer 900 MHz 4G in Andhra Pradesh, Tamil Nadu (excluding Chennai), Punjab and large parts of Karnataka and Uttar Pradesh (East) for the first time.

Vodafone Idea also bought 1800 MHz spectrum in Madhya Pradesh and 2500 MHz spectrum in Bihar, which it says will help boost network capacity in those circles.

Finally, Reliance Jio – which has no spectrum licences up for renewal – bought just 14.4 MHz of 1800 MHz spectrum for around INR9.73 billion to increase capacity in two circles.

Jio said the purchase increased its total spectrum footprint across India to 26,801 MHz, which it claims is the largest in the country.

“This new spectrum acquisition will continue to enable us serving aspirations of the new India, in terms of growing traffic demands and superior customer experience, which is no longer limited to only urban markets,” said Reliance Jio Infocomm chairman Akash M Ambani in a statement.

In the end, the auction went more or less according to the expectations of industry observers and analysts, who predicted that activity would be concentrated on spectrum renewals and selective strategic purchases where extra capacity was useful. Earlier media reports also noted that with 5G uptake remaining rather low, Jio, Airtel and Vodafone Idea already had enough 5G spectrum to serve demand until the next auction.

In any case, the final tally of INR113.4 billion is meagre compared to the DoT’s first 5G auction in 2022, which raked in INR1.5 trillion, as well as its 4G auction in 2021, which pulled in INR778.1 billion.

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