In the 5G spectrum auction, Telcos might spend up to Rs. 71,000 crore

According to research firm IIFL Securities, the three private telecom companies Reliance Jio, Bharti Airtel, and Vodafone Idea are anticipated to purchase spectrum worth Rs 71,000 crore in the next auction, leaving a significant bulk of the radiowaves up for bid unsold.

The government will auction off airwaves capable of supporting fifth-generation (5G) telecom services, including ultra-high-speed internet, next month for roughly Rs 4.3 lakh crore.

The government's in-principle approval to assign spectrum directly to businesses will have a negative impact on the outcome of the mega auction, according to the assessment released on Wednesday.

"Despite the fact that there is a plentiful supply, the government has not reduced the suggested reserve prices by TRAI despite claims to the contrary from carriers. The spectrum should be offered at base pricing, yet we only see telecoms bidding for 4 of the 10 bands. We predict Jio, Bharti, and Vi would spend Rs 37500 crore, Rs 25000 crore, and Rs 8500 crore on spectrum, respectively "explained IIFL.

The research company added that the government would collect Rs 6,200 in revenues during the current fiscal year if all telecom operators choose the option of equal annual instalments over 20 years.

Telcos might skip the expensive 700 MHz band spectrum, according to the report, while they wait for more reserve-price reductions. By putting in bids for the 850 MHz and 900 MHz bands, respectively, Jio and Bharti may increase their holdings in the sub-1 GHz spectrum.

"In the bands of 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz, we make no assumptions about any offers. Predicting bids for 3.6 GHz can be challenging, "It read.

According to the study, telcos might bid for tiny quantities of the 3.6 GHz and 28 GHz band, which are seen to be the best radiowaves for 5G technology, as doing so could result in significant savings in spectrum usage fees.

A new directive from the Department of Telecom (DoT) will allow telecom providers to pay proportionally lower spectrum usage fees when purchasing new radiowaves at the upcoming 5G auction.