More airwaves on offer for telcos: Why is it important now?

Telcos use spectrum auctions to shore up airwaves and expand network coverage; this year, however, it could be more about consolidation for the sector

- VERNIKA AWAL

On 8 March, the Department of Telecommunications (DoT) announced an upcoming round of telecom spectrum auction. According to the DoT, the auction would "augment the existing telecom services and maintain continuity of services." This announcement, in its own right, puts under the spotlight the rather different turnout that this year's spectrum auction could see.

An analysis of the history of spectrum auctions in India, coupled with close observations of India's three private telecom operators-Bharti Airtel, Reliance Jio Infocomm and Vodafone-Idea-reveal that the spectrum auction, slated to begin on 20 May, could see a considerably shallow showing from the telcos. A large part of this could be due to FY25 becoming a year of consolidation, instead of brute-force network expansion across India.

On this note, Voice & Data looks at what the upcoming spectrum auction could shape up to be like.

PARTICULARS OF THE AUCTION

To begin, all spectrum available across eight bands-from 800MHz in the low-frequency range to 26GHz in the high-frequency range-will be auctioned by the central government. A total of 10523.15MHz of spectrum is set to be auctioned, with the DoT setting the total reserve price of the auction at Rs 96,317.65 crore (USD 11.6 billion).

To be sure, the auctioning of spectrum is key to the operating procedure of telecom operators in India. The central government, through the Ministry of Communications' DoT, owns all spectrum in the country. Spectrum, specifically, refers to frequencies of airwaves that offer transmission of pockets of data wirelessly between the towers. Since transmission of information is a sensitive matter, government ownership and controlled access to applying companies is the only way for any entity to get access to Indian airwaves.