As expected, 700 MHz band spectrum was unsold, yet again, in the two-day 4G spectrum auctions in India this week. However, the government seems to have netted itself a reasonable sum of money, albeit nowhere near its pre-auction estimate.
The government is believed to have generated $10.6 billion, well below the 2015 amount – over $15.5 billion – and well below the overall sale price estimate – again over $15.5 billion – across the seven bands put on sale.
Indian press reports put this down to the apparently overpriced 700 MHz band (despite a 43 percent cut in price from 2016). Airwaves in the 2500 MHz 4G band also went unsold. India auctioned over 2,308 units across the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands.
Indian news reports also suggested that the big three operators, Reliance Jio Infocomm, Bharti Airtel and Vodafone Idea, were mostly bidding to renew airwave permits expiring from July. Jio was the only operator that had little choice but to buy due to a high number of expiring airwaves.
In post-auction announcements, Vodafone Idea Limited said it had used the auction to optimise its spectrum holding to create further efficiencies in a few telecom circles (usually a reference to a state-wide area). Bharti Airtel said that it had acquired 355.45 MHz spectrum across sub GHz, mid band and 2300 MHz bands. It said that this would benefit indoor, in-building and rural coverage.
Reliance Jio had a lot of spectrum up for renewal and was expected to be the largest bidder – to the tune of about $7.5 billion.
All winners will be required to pay upfront 25 percent of spectrum won in the 800 MHz and 900 MHz bands, and 50 percent of the rest of the bands. The outstanding sum is to be paid in 16 annual instalments after a two-year moratorium.
