Telcos Focused on 1800 MHz Band During 5G Spectrum Auctions, Here’s Why

This particular spectrum auction was one of the biggest ever for India and its future. The amount of money spent by the telcos is the highest ever spent on spectrum auctions. This was because the telcos wanted to shift to 5G as well as the presence of relaxed payment terms. One thing that’s great for the telcos is that there is no SUC on the new spectrum, and the floor rate of 3% has also been removed. Jio and Airtel would be able to save around Rs 2,200 crore and Rs 2,000 crore because of this, said ICICI Securities. Along with this, the telcos have got an option to pay the entire due amount in 20 years in equal instalments at the interest rate of 7.2%. What’s worth noting here is that the validity of the spectrum before it expires is also 20 years.

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During the spectrum auctions, telcos bid for 1800 MHz band airwaves. This is mostly because they want to deliver better 4G services in different parts of India. The 1800 MHz band also mostly got sold for reserve price only, and there was a bidding war for the particular spectrum band in only one circle.

“While the 3300 MHz band will be crucial for 5G technology deployment going forward, the appetite for the 1800 MHz band stems from the
rising mobile broadband usage and thus the need for improving network capacity. Further, apart from one circle in the 1800 MHz band, the spectrum was sold on reserve price only,” said Ankit Jain, Vice President and Sector Head, ICRA.