Reliance, Airtel, Vodafone Idea In Focus: Govt Auctions 10,522.35 MHz In Various Bands For Rs 96,238.45 Crore

Telecom stocks are in focus on June 245 as the government commenced the spectrum auction of 10,522.35 MHz in various bands valuing Rs 96,238.45 crore at reserve prices. Stocks like Vodafone Idea, Bharti Airtel and Reliance Industries which owns Reliance Jio, are in focus. The auction is in line with the government's commitment to facilitate affordable, state-of-art high-quality telecom services to all citizens.

On June 25, auctions of spectrum bands are up for bidding. These bands are 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz. The total quantum of the spectrum being auctioned is 10,522.35 MHz in various bands valuing Rs 96,238.45 Crores at reserve prices.

Of the total, the highest spectrum of 221.4 Mhz will be sold at 1800 MHz worth Rs 21,752.4 crore, followed by 118.75 Mhz spectrum in 800 Mhz worth Rs 21,341.25 crore. Further, the 1,110 Mhz spectrum of the 3300 Mhz band is worth Rs 16,251.2 crore. While 117.2 Mhz spectrum of 900 Mhz is sold at Rs 15,619.6 crore, and that of 125 Mhz spectrum in 2,100 Mhz bands is worth Rs 11,810 crore.

Lastly, the 60 Mhz spectrum in the 2,300 Mhz band is worth Rs 4,430 crore, and 70 Mhz spectrum in the 2,500 Mhz band is worth Rs 2,300 crore, and the 8,700 Mhz spectrum is offered in the 26 GHz band worth Rs 2,734 crore.

Some of the key highlights of the spectrum auctions are:

1. The auction will see participation from three bidders: M/s Bharti Airtel Limited, M/s Vodafone Idea Ltd, and M/s Reliance Jio Infocomm Ltd.

2. Process of auction: The auction shall be a Simultaneous Multiple Round Ascending (SMRA) e-auction.

3. Duration of spectrum: Spectrum will be assigned for twenty (20) years.

4. Payment: Successful bidders will be allowed to make payments in 20 equal annual instalments, duly protecting the NPV at the interest rate of 8.65%.

5. Surrender of the spectrum: The spectrum acquired through this auction can be surrendered after a minimum period of ten years.

6. Spectrum Usage Charge: There will be no Spectrum Usage Charges (SUC) for Spectrum acquired in this auction.

7. Bank Guarantees: It is not required by the successful bidder to submit a Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG).