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regular-article-logo Sunday, 16 June 2024

Department of Telecommunications clears Jio, Airtel, Vodafone Idea to bid for spectrum

Reliance Jio has submitted the highest earnest money deposit (EMD) of ₹3,000 crore, despite not needing to renew any licence. By contrast, Bharti Airtel and Vodafone Idea, which require spectrum renewals in certain circles, deposited Rs1,050 crore and Rs300 crore, respectively

Our Special Correspondent New Delhi Published 21.05.24, 11:13 AM
Representational image

Representational image File picture

The Department of Telecommunications (DoT) on Monday released the final list of telecom companies — Reliance Jio, Bharti Airtel and Vodafone Idea — which will participate in the spectrum auction starting June 6.

Reliance Jio, India’s largest telecom service provider, has submitted the highest earnest money deposit (EMD) of 3,000 crore, despite not needing to renew any licence. By contrast, Bharti Airtel and Vodafone Idea, which require spectrum renewals in certain circles, deposited Rs1,050 crore and Rs300 crore, respectively.

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The auction will offer 96,317.65 crore worth of 5G airwaves across various frequency bands, including 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz.

Analysts highlight the importance of EMDs in auctions. “The reserve price is the minimum price set by the seller. EMD requirements vary across different bands and circles. On average, a telecom company can spend 15-18 times their EMD. For example, Jio’s EMD of 3,000 crore indicates they can spend almost 35,000 crore in the auction,” an analyst said.

The spectrum will be assigned for 20 years, with successful bidders allowed to make payments in 20 annual instalments. The DoT has also provided an option to surrender the spectrum after a minimum of 10 years.

Bharti Airtel, India’s second-largest telecom service provider, needs to renew spectrum in Jammu & Kashmir, Odisha, Bihar, UP (East), Bengal and Assam. Vodafone Idea requires renewals in Bengal and UP West circles.

According to the DoT, Jio has been allocated 21,363 eligibility points, followed by Airtel with 7,613 and Vi with 2,200. These points determine the bands and service areas companies can bid, in line with spectrum caps.

Analysts expect the government to raise 18,000 crore from this auction, approximately 19 per cent of the total spectrum value.

In the last auction held in July 2022, the government raised over 1.5 lakh crore, offering more than 72 GHz of airwaves across 10 different 5G bands, with a reserve price of 4.3 lakh crore.

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