The three private telecom operators Reliance Jio, Bharti Airtel and Vodafone Idea, are expected to buy spectrum worth Rs 71,000 crore in the upcoming auction.
The Department of Telecom (DoT) has issued a new order that will enable telecom operators to reduce spectrum usage charges proportionately on buying fresh radio waves in the upcoming 5G auction.
According to research firm IIFL Securities: “While supply is abundant, the government has not cut TRAI's proposed reserve prices despite telcos' assertion that these were still high. We see telcos bidding only for 4 of the 10 bands and spectrum should be sold at base price. We estimate spectrum outlay of Rs 37500 crore, Rs 25000 crore and Rs 8500 crore for Jio, Bharti and Vi.”
According to the report, the government's in-principle nod to allocate spectrum directly to enterprises is going to have an adverse outcome of the mega auction. The government will auction about Rs 4.3 lakh crore worth of airwaves capable of offering fifth-generation or 5G telecom services, including ultra-high-speed internet.
The research firm further said if all telecom operators avail the option of equal annual installments over 20 years, the government would receive Rs 6,200 proceeds in the current financial year. Telcos may give the premium 700 MHz band spectrum a miss as they await further reserve-price cuts. Jio and Bharti may strengthen their sub-1 GHz holdings by bidding for the 850 MHz and 900 MHz bands, respectively.
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