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BENGALURU (Reuters) – India has put telecom spectrum worth about 962.38 billion rupees ($11.53 billion) up for auction on Tuesday, it said in a statement, even as analysts expected a lackluster participation from players as they supported existing spectrum.
A total of 10 GHz of radio waves are up for sale in this auction, ranging from 800 MHz to 26 GHz.
Why is it important
The Indian government derives a significant portion of its revenue from spectrum auctions, which grant telecom companies rights to the airwaves for a certain period.
During the previous auction in August 2022, telecom companies Vodafone (NASDAQ:) Idea (VI), Bharti Airtel and Reliance Industries’ Jio Infocomm jointly acquired 5G spectrum worth $19 billion to boost capacity in the world’s second-largest smartphone market.
The amount of spectrum up for auction this time is lower than in the previous year, as telcos have already acquired enough to meet most of their bandwidth requirements in the previous auction, which is also a possible indicator that they will not bid for larger blocks.
Main context
“The bidding process is unlikely to be a lively process… We do not expect any player to place a strong bid in the auction,” analysts at Antique Stock Broking said in a note.
Antique expects Bharti to bid for some of its expiring spectrum – airwaves whose license is expiring – worth Rs 38.2 billion, while Jio, which has no spectrum awaiting renewal, is likely to be selective.
The memo added that debt-laden VI can only bid for spectrum that is expiring or to fill gaps.
Local newspaper The New Indian Express reported earlier this month, citing unnamed officials, that the auction had been postponed twice until a new government was elected.
Market reaction
Shares of the two listed telecom companies erased their early gains during the day, with VI falling 0.17% and Bharti Airtel falling 0.3%.
