As widely predicted, the impending Indian spectrum auction, probably taking place in March, is not going to generate a lot of revenue for the country’s Department of Telecommunications (DoT), something the DoT itself has now admitted.
The DoT has in fact lowered the spectrum auction revenue target for financial year 2024 from earlier estimates of Rs5,000 crore (about US$601 million) to about a tenth of that amount.
Spectrum worth a staggering US$11.7 billion or more will be up for sale. including most unsold spectrum from the last auction, except for the 600MHz band. As we mentioned earlier this month, this will be the subject of studies to ensure there is no interference with satellite operations.
The reason for the lower target, according to India’s Economic Times, seems to be that most Indian operators feel their 5G requirements have been fulfilled for the time being.
Bharti Airtel and Vodafone Idea (or Vi) in particular will probably bid mainly to renew spectrum. The total sale could in fact fetch between US$241 million and US$361 million, of which the DoT will be able to claim upfront payment or a first instalment of about Rs500 crore or US$60.2 million.
This is well below the more than US$19 billion that the government raked in from the last 5G auction in August 2022.
However, the DoT says it will at least be able to bank some 85,000 crore (US$10.2 billion) for the financial year 2024 from a number of other sources including license fee and spectrum usage charge payments and spectrum instalments from past auctions, along with sums owed to it by the state-run operator BSNL.
