High supply, low demand may spoil next spectrum auction

The next spectrum auction scheduled to start from 1 March could see limited participation from two of the three largest telecom operators as they will mostly look at renewal of radio airwaves due for expiry this year, analysts said, adding that this may reduce competition and may not fetch the government anything more than the base price.

They said Bharti Airtel Ltd has amassed large chunks of spectrum through mergers and acquisitions, which should lower its renewal requirement, while Vodafone Idea Ltd (Vi) may not bid aggressively due to large spectrum holding, relatively under-utilized network and stressed financials. Airtel has 57MHz spectrum in the 1,800MHz band and 6.2MHz in the 900MHz band due for renewal in 2021. Vi’s 46MHz spectrum in the 1,800MHz band and 6.2MHz in the 900MHz band will expire.

The department of telecommunications (DoT) on Wednesday issued a notice inviting applications from eligible bidders for sale of 2,251MHz of spectrum at a reserve price of ₹3.92 trillion.