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Govt mop-up grows by Rs 112 crore, UP (East) 1800MHz race eases – Economic Times

Bids for airwaves increased by Rs 112 crore on Saturday, in India’s first 5G auctions, boosting the government’s total collections to Rs 1,49,967 crore at end of day 5, even as the battle for 1800 MHz spectrum in the key Uttar Pradesh (East) market appeared to have eased, indicating that the auction is likely to conclude soon.

“Demand for 1800 MHz in the UP (East) circle was more subdued today, which suggests the auction may end soon,” a top telco executive, who didn’t want to be named, told ET.

Bids resume on Sunday, day 6 of the exercise, from round 31, with some industry trackers expecting the sale may possibly end on the same day.

Speaking to reporters at an event in Mumbai on Saturday, telecom minister Ashwini Vaishnaw said he expects the first wave of 5G rollouts in India by October, and sees strong adoption levels over the next 18 months once 5G devices become more affordable. “(I) expect to see a good presence of 5G within one-and-ahalf to two years. Post-rollout… industry tells us 5G handset (prices) will soon come down to Rs 10,000,” Vaishnaw said.

The minister also expects the telecom market to see healthy competition and retain its three-private player structure, ruling out the likelihood of its narrowing to a duopoly.

The fifth day of the 5G auctions saw seven more rounds of bidding, but despite no excess demand in the final rounds, the per unit price of 1800 MHz spectrum in UP (East) was almost 60% higher that its Rs 91-crore base price, at Rs 145.47 crore.

In fact, the current auction price of 1800 MHz spectrum in Uttar Pradesh (East) has almost drawn level with its Rs 153 crore base price of the March 2021 auction. Auction trackers estimated that outflow for the 1800 MHz band pan-India has risen to Rs 10,170 crore — almost five times the base price of Rs 2,116 crore.

Over the past three days, the price of 1800 MHz spectrum for UP (East) has risen beyond the reserve price as

slugged it out with Reliance Jio to protect its market share in India’s most populous circle, especially as some of its 900 MHz airwaves will expire in 2024, industry experts said.

At the end of Saturday’s bidding, analysts estimated Jio’s aggregate spectrum buys upward of Rs 84,000 crore, while Airtel’s were estimated above Rs 46,200 crore. Vodafone Idea’s spends are pegged around Rs 18,600 crore.

HIGH STAKES

The outcome of the spectrum battle in UP (East) is vital for

as it has 5 MHz of liberalised 900 MHz spectrum, or airwaves bought in an auction, and another 6.2 MHz of un-liberalised spectrum in the same band in in that circle, expiring in February 2024. Un-liberalised airwaves are those allotted through the administrative route, or without auctions.

The stakes are high in UP (East) circle for the Sunil Mittal-led telco, which could face business challenges post-February 2024 if it doesn’t get at least 5MHz of backup airwaves in the 1,800 MHz band.

It would otherwise be left with just 5 units of liberalised 900 MHz airwaves that won’t be enough to fight Jio, especially since the latter is reckoned to have bought 10 units of super-efficient 700 MHz spectrum across India, including in UP (East). Airtel has been locked in a bidding duel to defend market share in this key circle. No 900 MHz spectrum is on offer in UP (East) in this auction.

At present, Airtel has 15 MHz of liberalised spectrum in 1800 MHz band in UP (East), while Vi and Jio have less — 10 MHz each. Analysts said the circle is the fourth largest service area in terms of adjusted gross revenue (AGR) and accounts for 6.6% of AGR revenue.