India spectrum auction rakes in $9.9b as 700-900-MHz bands go unsold

India spectrum auction rakes in $9.9b as 700-MHz and 900-MHz bands go unsold
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India’s latest spectrum auction wrapped up on Thursday, and after 30+ rounds in five days, operators spent Rs 65,789 crore (around ($9.9 billion) on about 40% of the total spectrum value on offer, leaving the coveted but overpriced 700-MHz and 900-MHz bands untouched.

In total, cellcos bought 965 MHz worth of spectrum out of the 2,354.55 MHz put up for auction, reports the Economic Times of India:

The bidding activity took place only in few circles with interest continuing to be largely around 1800 MHz and 2300 MHz that can be used by operators to provide 4G services.

Industry also showed interest in 2100 MHz (3G/4G) band, 2500 MHz (4G) band and 800 MHz (2G/4G) bands.

The results aren’t too surprising – market analysts predicted several months ago that the 700-MHz band alone would go unsold due to the high reserve price. Even the government’s Department of Telecommunications expected to raise about $10 billion, despite the total spectrum on offer valued at $84 billion.

However, it wasn’t just about price – the Cellular Operators Association of India (COAI) stated it was also down to the massive debt and sluggish growth currently plaguing India’s telecoms sector, reports the Economic Times:

“We are hopeful the Government and the DoT will take cognizance of the role a high reserve price had on bidding, as far as the 700 MHz is concerned, and will recalibrate the price so that spectrum in the band could be put up for auction, maybe two years from now,” Rajan S Mathews, Director General, COAI, said in a statement.

The industry body said that huge investments will be required to roll out 4G services. For an industry saddled with debts, this will be a challenge.

However, the COAI did say that the spectrum cellcos did acquire will go a long way in helping them build the state-of-the-art networks they’ll need for a “robust blue-print for transforming the digital identity of the country”.

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