March 5 2021 (updated March 8):The government is touting the Rs 77,815 crores it got in bids at the recently concluded auction of Indian cellular spectrum, but there is less than meets the eye here: only 37% of the spectrum on offer was sold. Value-wise this represents just 19%. (Communications Today)
In a case of history repeating itself after the last ( 2016) auction, there were no takers for the more efficient 700 MHz band which is ideal for 5G, because government placed the reserve price prohibitively high.
While the whole world is moving towards 5G and operators like Airtel have given live demonstrations of 5G in India, the government is still hanging on to the other 5G band -- 3300- 3600 MHz (3.3-3.5 GHz) -- and did not offer any portion of it at the auction. The Defence and Space departments are said to be reluctant to part with this band.
But holding back bands of spectrum that are best suited to 5G , this late in the global 5G rollout timetable, appears to be a retrogade decision. It is particularly unfortunate, as India appeared, a year ago, to be moving briskly towards a timely 5G rollout, with a thoughtful public-private-academic partnership put in place by the previous Telecom Secretary, Aruna Sundararajan.
Result: Indian operators who bid for spectrum did so only to consolidate their hold on 4G customers and were not able to plan for 5G.
Indeed, this can hardly be called an auction. Distress in the cellular services sector has reduced the bidders to 3. Hindu Businessline writes in an editorial entitled “Low Bandwidth”: “All the spectrum sold were acquired at the reserve price, which means that there was no competitive bidding. This raises questions about the efficiency of the auction design and the manner in which the high reserve price has been arrived at.”
The Hindu calls this “Clearing a low bar”: “From auction formats that may no longer be relevant given the sharply reduced number of players, to grossly unrealistic pricing of spectrum, and regulatory norms and tax practices that threaten to tip the sector into an unhealthy and fractious duopoly, the government has its task cut out. It must now act quickly to ensure it does not end up hurting the very sector that has become a key multiplier of economic empowerment and progress.”
New Indian Expresssuggests that governmenrt should take away some learnings from the auction and reconsider selling ( spectrum) in limited amounts to ensure competitive pricing, besides pricing spectrum efficiently.
We have reported on the bids made by Airtel and Reliance. The third bidder VI (Vodafone-Idea) got 11.8 MHz in the 900 and 1800 MHz bands for Rs 1993.4 crores