All you need to know

India will begin this year’s spectrum auction on June 25, selling airwaves worth Rs 96,317.65 crore. The auction, initially set for May 20, has been rescheduled twice.

The government aims to raise approximately Rs 10,000 crore from the auction, though brokerage reports estimate it could be between Rs 4,000 crore and Rs 16,600 crore. In the 2022 auction, the government achieved a record Rs 1.5 lakh crore.

Only about 17 percent of the spectrum value is expected to be sold, likely the lowest since 2014. Analysts predict that spectrum will be sold near reserve prices due to the lack of excess demand.

The Department of Telecommunications (DoT) will auction frequencies in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands.

Spectrum bought in this auction will be valid for 20 years. Telcos can share, trade, lease, and surrender the spectrum after 10 years.

Telcos might opt to pay the full amount upfront to save on interest costs. The interest rate for deferred payments in this auction is 8.65 percent, higher than the 7.2 percent rate in the 2022 auction.

For them, payment options include part payments with corresponding moratoriums or 20 yearly instalments, with the first due 10 days post-auction. Pre-payment is allowed without penalty.

For the latest round of spectrum auction, the telecom department (DoT) excluded the 600 MHz and 700 MHz bands. The department also increased reserve prices by 12 percent and 8.9 percent for the 3,300 MHz and 26 GHz bands, respectively.

The spectrum prices also increased by 11-14 percent in bands or circles that saw demand in the 2022 auctions.

According to analysts, Reliance Jio, Bharti Airtel Ltd, and Vodafone Idea Ltd will compete for the spectrum and are expected to spend about Rs 15,000 crore on 4G and 5G bands.

Reliance Jio, Bharti Airtel, and Vodafone Idea have submitted a total of Rs 4,350 crore as earnest money deposits.

Reliance Jio deposited the highest Rs 3,000 crore, Bharti Airtel Rs 1,050 crore, and Vodafone Idea Rs 300 crore. Telcos can bid three to four times the amount based on their earnest money deposits.

Bharti Airtel could be the biggest spender in the 2024 spectrum auction with an outlay of Rs 10,400 crore as the telecom major aims to firm up its sub-1GHz holdings and raise its share of 1800-MHz and 2300-MHz bands, according to analysts. It is facing renewals for 42 Mhz of spectrum in six circles of Assam, Bihar, J&K, Orissa, UP East, and West Bengal.

The Sunil Mittal-led telco recently cleared its past spectrum auction dues to save on interest costs.

Vodafone Idea, on the other hand, may renew 900 MHz in two circles. The telco is facing 900 MHz renewals in two circles – UP West and Bengal. “We expect the telco to pick up 5MHz and 4.6MHz in this band,” IIFL said in a note.