Spectrum receipts: Low target shows 5G auction unlikely in FY22

By fixing a lower revenue receipt target of Rs 53,987 crore from telecommunication services for FY22, the government has signalled it doesn’t attempt to hold auctions for the 5G spectrum within the 3.5 gigacycle per second band within the next business.

The government plans to carry auctions for 4G spectrum in March, the yield of which might be accounted for within the next business. This auction is for 4G bands of 700 megacycle, 800 MHz, 900 MHz, 1800 MHz, 2,300 MHz, and 2,500 MHz.

The 4G spectrum auctions were proclaimed by the government late last year, however analysts were expecting that someday throughout the latter 1/2 successive business, the government can also hold auctions for the 5G band in 3.5 GHz, however currently it appears unlikely.

The quantum of spectrum being place up for auctions in March is price Rs 3.92 lakh crore at reserve value, that the business sees as too high. Therefore, participation is predicted to be restricted to revitalising the airwaves that are expiring later this year. Viewing the budget target, it appears the government has accepted this and is trying to garner solely around Rs 60,000-70,000 crore from the auctions. 

Since operators have the choice of paying 25% of the entire quantity bid for spectrum below one gigacycle per second – like 800 megacycle and 900 megacycle – and 500% of the entire quantity bid for spectrum higher than one gigacycle per second – like 2,300 megacycle or 2,500 megacycle – with a lot of spectrum being place up for auctions higher than one gigacycle per second, the government would be ready to get around Rs 30,000-35,000 crore as Associate in Nursing direct payment. 

 

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