Business Standard

No change in reserve price of expensive spectrum bands


The reserve price for two of the most expensive bands — 800MHZ and 900MHZ — in the spectrum auction on May 20 has not been changed by the government.

In all the eight spectrum bands the government is putting up for auction, the reserve prices for the Delhi telecom circle are the highest, followed by Mumbai, with Kolkata a distant third. The Department of Telecommun­ications (DOT), through a notice released on Friday, announced that telecom players would have until April 22 to submit bids for the auction, which will feature all the available spectrum in 800MHZ, 900MHZ, 1800MHZ, 2,100MHZ, 2,300MHZ, 2,500MHZ, 3,300MHZ, and 26GHZ bands.

The government, however, seems to have resisted raising the reserve prices for the usually sought-after spectrum bands in key telecom circles. This rings true for Delhi, Mumbai, and Kolkata, which are considered by the DOT as ‘metro circles’ owing to their strategic and economic importance, and population among India’s 22 telecom circles.

For the 800MHZ band, Delhi had a reserve price of ~479 crore per MHZ, followed by Mumbai (~468 crore) and Kolkata (~153 crore). This was the same in 2022. Similarly, for the 900MHZ band, Delhi (~ 436 crore), Mumbai (~389 crore), and Kolkata (~153 crore) have the same reserve prices as the preceding auction. In the 1,800MHZ band, while Delhi has the same reserve price of ~ 270 crore as in 2022, the price for Mumbai has been raised to ~264 crore, up 12 per cent from ~239 crore.

In Kolkata, the price has been raised to ~109 crore for the latest auction, up from ~97 crore in 2022, again a 12 per cent rise. In the 2,100MHZ band, while the reserve price in Delhi has gone up 12 per cent to ~251 crore, up from ~224 crore, the prices for Mumbai (~196 crore) and Kolkata (~80 crore) have remained the same. There has been no change in reserve prices in the 2,300MHZ and 2,500MHZ bands as well.

The government has set a cumulative reserve price of ~96,317.65 crore for the 10,523.15MHZ of spectrum put up for auction. Meanwhile, in the last round of auctions ended on August 1, 2022, the government had put up nearly 7 times more spectrum (72,098MHZ). Of this, 51,236MHZ or 71 per cent of the total was sold with the total bid amounting to ~1.5 trillion. The pricey but super-efficient 700MHZ band has been kept out of the bidding for the upcoming auction.

Witnessing bidding for the first time in 2022, large chunks of spectrum in the band were picked up by Reliance Jio for an estimated ~39,270 crore. Before this, the band had gone unsold in two successive auctions due to high prices. In 2022, reserve prices in the band were cut by 40 per cent. The successful bidders will be allowed to make payment in 20 equal annual instalment­s, duly protecting the net present value at the interest rate of 8.65 per cent, the DOT has said. There will also be no spectrum usage charges for the spectrum acquired in this auction.

 ?? ?? The reserve price for the Delhi telecom circle is the highest, followed by Mumbai, with Kolkata a distant third
The reserve price for the Delhi telecom circle is the highest, followed by Mumbai, with Kolkata a distant third

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