India’s cabinet has backed a regulator proposal to auction of a huge amount of spectrum that could generate as much as a record INR5.6 trillion ($85 billion).
The Times of India has reported that an “official source” has stated that the auction proposal “has been cleared”, although the government has not released a confirmation of this via official channels.
If it goes ahead, the auction will be India’s largest ever. It will be held in September, with spectrum available across multiple bands – 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz frequencies.
The desirable 700MHz spectrum will command a premium, with a reserve price of around INR11.5 billion per 1MHz. It will be sold in blocks of 5MHz, so for an operator to acquire this frequency the minimum spend will be INR57.5 billion. This is offset by the low cost of delivering services in this band – it is roughly 70% cheaper than the 2100MHz band used for 3G.
Operators in India had expressed concern over the sale of 700MHz spectrum, arguing that the 4G ecosystem is currently underdeveloped and that accordingly this frequency should not be put to auction for another two years.
The country’s 2015 auction brought in INR1.1 trillion from eight bidders, which at the time was a record amount. If the new auction generates as much as anticipated, it would far exceed this sum. Applicants are expected to receive bidding invites on 1st July, with preliminary bidding held on 6th July.