Spectrum auction: Centre keeps reserve price of expensive bands unchanged

The government seems to have resisted raising the reserve prices of usually sought-after spectrum bands in key telecom circles

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The reserve price of two of the most expensive bands -- 800 MHz and 900 MHz -- 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 coming in a distant third.

The Department of Telecommunications (DoT), through a notice released on Friday, announced that telecom players will have until April 22 to submit bids for the auction, which will feature all the available spectrum in 800 MHz, 900 MHz, 1800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands.

The government, however, seems to have resisted raising the reserve prices of 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 800 MHz band, Delhi had a reserve price of Rs 479 crore per MHz, followed by Mumbai (Rs 468 crore) and Kolkata (Rs 153 crore). This was the same in 2022.

Similarly, for the 900 MHz band, Delhi (Rs 436 crore), Mumbai (Rs 389 crore), and Kolkata (Rs 153 crore) have the same reserve prices as the preceding auction.

In the 1,800 MHz band, while Delhi has the same reserve price of Rs 270 crore as in 2022, the price in Mumbai has been raised to Rs 264 crore, up 12 per cent from Rs 239 crore.

In Kolkata, the price has been raised to Rs 109 crore for the latest auction, up from Rs 97 crore in 2022, again a 12 per cent rise.

In the 2,100 MHz band, while the reserve price in Delhi has gone up 12 per cent to Rs 251 crore, up from Rs 224 crore, the prices for Mumbai (Rs 196 crore) and Kolkata (Rs 80 crore) have remained the same.

There has been no change in reserve prices in the 2,300 MHz and 2,500 MHz bands as well.

The government has set a cumulative reserve price of Rs 96,317.65 crore for the 10523.15 MHz worth of spectrum put to auction.

Meanwhile, in the last round of auctions ending on August 1, 2022, the government had put up nearly 7-times more spectrum (72,098 MHz).

Of this, 51,236 MHz or 71 per cent of the total was sold with the total bid amounting to Rs 1.5 trillion.

The pricey but super-efficient 700 MHz 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 at an estimated Rs 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 installments, 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.