The spectrum auctions which the government plans to hold in March are most likely to see operators bidding conservatively, which implies that apart from renewing what is expiring, they will just fill the gaps in their portfolio to leverage their current spectrum holding to the maximum. Also, none of the operators are anticipated to bid for the premium 4G spectrum in the 700 Mhz band mainly because of the higher reserve price tag. This implies that for the second time — the initially time this band was place up for auction was in 2016 — there would be no takers for this band due to prohibitively higher price tag.
Reliance Jio desires to renew the greatest chunk of its spectrum — its 81.25 Mhz in 800 Mhz band which is made use of for offering 4G services, is expiring later this year. So it is confident to bid for adequate spectrum in this band as it desires to have 10 MHz in just about every circle.
In addition, it is most likely to purchase further spectrum in 1800 MHz and 2300 MHz band in order to develop a portfolio of 10 MHz and 40 MHz, respectively. With this tactic, Jio will finish up expanding its 4G spectrum from the current 23.4 MHz to 40.82 MHz — a 74.4% boost.
The company’s total outflow is most likely to be Rs 57,790 crore at the reserve price tag. Since operators are essential to spend only 25% upfront and can spend the remaining quantity more than a 16-year period immediately after a two-year moratorium, its instant outflow will be roughly Rs 14,400 crore.
In the case of Bharti Airtel, a total of 57.60 Mhz is expiring later this year, of which bulk 51.40 Mhz is in 1800 Mhz and 6.20 Mhz is in 900 Mhz band.
The firm is most likely to go for spectrum in the 900 MHz to full a block of 5/10 MHz in just about every circle. Also, it is most likely to attempt to take further spectrum in 1800 (to full 15 MHz), 2100 (to full 10 MHz), and 2300 MHz band (to full 40 MHz).
With this bidding tactic, Bharti will finish up expanding its 4G spectrum from the current 31.6 MHz to 44.9 MHz — a 42% boost. Its total outflow is most likely to be Rs 34,023 crore at the reserve price tag and if its pays 25% of the quantity upfront, its instant outflow will be roughly Rs 8,500 crore.
For Vodafone Idea, a total 51.05 Mhz spectrum is expiring, of which once more bulk of 51.05 Mhz is in 1800 Mhz although 6.20 Mhz falls in 900 Mhz band.
It is most likely to opt for spectrum in the 900 MHz to full a block of 5 MHz in just about every circle. Also, it may perhaps attempt to take further spectrum in 1800 (to full 10 MHz), 2100 (to full 10 MHz), and 2500 MHz band (to full 20 MHz).
If it adopts this tactic, Vodafone Idea will finish up expanding its 4G spectrum from the current 39.1 MHz to 45.4 MHz — a 16.11% boost. Its total outflow is hence most likely to be Rs 17,908 crore at the reserve price tag. At 25% upfront payment, its instant outflow is most likely to be roughly Rs 4,700 crore.
As reported by FE earlier, of the total 2,251 MHz of spectrum worth Rs 3.92 lakh crore at reserve price tag in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands which would be place up for auctions, the government can mop up a total of about Rs 1.09 lakh crore, assuming there’s no participation for 700 Mhz band. This would be about 28% of the total worth. This implies that about 60% of spectrum will stay unsold.