Government targets nearly 5 lakh crore from spectrum sale but industry disinterested in large buy

The Telecom Department has designed the largest spectrum sale in history from September 29 onwards. Around Rs 5.6 lakh crore valued spectrum will be available for option as per valuation in the previous rounds. The auction will be for 3G and 4G bands that include the 700 MHz bands which is very valuable for 4G services. But industry analysts indicate that there may be only muted response from the Telecom players as there may come only gap filling demands from the existing players.

Operators who have spectrum deficiency for the supply of 4G and 3G services – idea and Vodafone may use the auction to fill the gap. Large scale demand for the proposed spectrum that the Telecom Department estimated at around Rs 556000 crore may not materialize.

Industry experts observed that already Reliance Jio has made its 4G products on the launch pad and other existing players also have made substantial investment in spectrum during the last auctions.

But there are some other analysts like Credit Suisse who believe that this time there is opportunity for traditional operators to accumulate spectrum to compete with Reliance Jio. If firms are thinking about giving a competition to Jio, they may opt for more bidding. But at the same time, they may avoid a price war because of the availability of large scale spectrum this time.