India will hold a multi-band spectrum auction in May or June this year, according to telecoms secretary Rakesh Garg. Proceeds would be expected to surpass the record US$17.7bn raised in the 2015 auction.
India will hold a multi-band spectrum auction in May or June this year, according to telecoms secretary Rakesh Garg. Proceeds would be expected to surpass the record US$17.7bn raised in the 2015 auction.
Speaking at the FICCI-WBA Vision Forum in New Delhi, Garg said the government would auction “all available spectrum … that industry is demanding”, local media reported.
Last July, the Department of Telecommunications (DoT) asked the Telecom Regulatory Authority of India (Trai) to set reserve prices for spectrum in the 800 MHz, 900 MHz, 1,800 MHz, 2.1 GHz, 2.3 GHz and 2.5 GHz bands. The auction could reportedly also include 700 MHz airwaves.
According to an Economic Times report, up to 2,000 MHz of spectrum may be auctioned in the planned auction. A source was cited saying proceeds are likely to be “much higher” than those raised in the 2015 auction.
India raised the US$17.7bn from an auction of spectrum in the 800 MHz, 900 MHz, 1800 MHz and 2.1 GHz bands last March. The three largest mobile operators – Bharti Airtel, Vodafone India and Idea Cellular – along with newcomer Reliance Jio amassed nearly 85% of the available airwaves.
In a recent research note, Bernstein analyst Chris Lane said Vodafone, whose group CEO Vittorio Colao (pictured) has confirmed is preparing for an IPO of the Indian unit, is seriously short of 4G spectrum in key circles compared with Airtel and Jio and will therefore need to spend big at the planned auction.
Credit Suisse analysts said the planned auction is likely to be the biggest offer for sale of spectrum ever in the industry, adding that even partial success could damage operators’ returns.
“We are not even beginning to argue that all of this spectrum will be sold – the amounts involved are just too large given the current industry size,” they said. “However, even a partial sale (of say US$10-15bn) could be a serious hit on operator returns – that is not reflected in stock prices, in our view.”
