Vodafone Idea and Other Telcos Unlikely to Show Interest in Upcoming Spectrum Auction: Analysts

The biggest upcoming event in the telecom industry is going to be the auction of the 5G and 4G airwaves which is bound to happen in the next calendar year or to be precise, sometime in the last quarter of the current FY. As per a new ET Telecom report, however, although the 5G spectrum auction is happening as earliest as possible, it is likely to garner a lukewarm response from the telecom operators thus cutting down on the potential revenue that the government could have generated from this auction. According to the report, the government is expected to sell less than 10% of the total spectrum, which is available right now for the telecom companies. Another thing to factor in, in the case of the 5G auction is that, instead of the massive amount of Rs 5.22 lakh crore which the government could have netted if the entire airwaves were to be sold, will come down to only Rs 40,000 crore given the quantum of spectrum which will be bought in the upcoming auction.

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Small Quantum of Airwaves to Sell in Upcoming Auction

Analysts are of the opinion, that the main 700 MHz premium spectrum which is the highlight of the auction and is usable for both 4G and 5G services will see light bidding because the telecom operators are financially stressed and are unlikely to divert their resources to purchase new spectrum. Rajiv Sharma, research head at SBICap Securities said about this, “Given the high reserve prices, acute balance sheet stress of older carriers and absence of an immediate 5G business case, the government is unlikely to see any meaningful take-up of pure 5G and 700 MHz airwaves.” He also added that the telecom operators are unlikely to buy even 10% of the total targeted spectrum which will be put up for sale in this auction.