4G Spectrum Available for Less than Half the Price in Upcoming Auction

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The Department of Telecommunications (DoT) which decides the price of the spectrum bands or airwaves sold to the telecom operators will be availing the 4G spectrum for less than half the price in the upcoming auctions. Just to be clear, half the price here means half the price of what the operators paid for the spectrum bands in the previously held auctions. The 4G spectrum auction is slated to start from March 2021 in India. It is worth noting that most of the spectrum bands' base prices are suggested by the Telecom Regulatory Authority of India (Trai). Still, DoT has made some changes to the pricing in the 700 MHz and 1800 MHz bands for select circles — more details on the story ahead.

DoT Lowered the Price of 900 MHz Band in 11 Circles of India

As per a report from PTI, DoT has lowered 900 MHz spectrum band's reserve price in over 11 circles of India. This includes Karnataka, Assam, and North-Eastern India. What’s worth noting here is that the price reduced by the telecom department is more than 50% in certain circles. When measured, the price reduction in all the concerned circles ranges from 27% to 57% compared to the same bands' reserve price in 2014-2015 auctions.

In Delhi, the telecom department has reduced the reserve price of 900 MHz bands by 28%. This time around, the price set is Rs 585 crore per MHz compared to Rs 811.62 crore in the previous auctions.

At the same time, the reserve price for 900 MHz band in Kerala has reduced from Rs 369.4 crore to Rs 199 crore, in Karnataka has reduced from Rs 557.5 crore to Rs 238 crore meaning a reduction of more than 50%, and in Madhya Pradesh from Rs 309.5 crore to Rs 195 crore for the upcoming auctions. The older prices mentioned are from the March 2015 auctions.

DoT has focused on price reduction for all the circles where the operators didn’t bid much for the spectrum in the previous auction. Circles such as Gujarat, UP East, UP West, and Bihar will see a big price cut in spectrum bands in the upcoming auction.

Reserve price in the 800 MHz bands has been reduced because last time around, bidders didn’t show much interest in this group of airwaves. ICICI Securities has said that the base price in the 800 MHz bands has been reduced by 18.5% compared with the price set in the 2016 auction.

However, it is worth noting that the base price in the 1800 MHz and 2300 MHz bands has increased by 14.5% and 17.5% respectively, according to ICICI Securities.

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