The Department of Telecommunications (DoT) has collected more than Rs 1,000 crore from the private telecom operators – Bharti Airtel, Vodafone Idea (Vi), and Reliance Jio. This payment corresponds to the first tranche of money they owe for airwaves obtained in a recent 5G spectrum auction. So what exactly does the deal entail, and what type of ripple effects might it have on the telecom industry?
Payments Break-up
According to officials, the distribution of payments between the individual telecom majors is as follows:
- Bharti Airtel: Rs 595 crore
- Vodafone Idea (Vi): Rs 315 crore
- Reliance Jio: Rs 95.72 crore
The deposit amounts deposited by Airtel and Vi were marginally lower than their bidding successive payment because of solar spectrum being availed described on an interim jurisdiction.
- Airtel: Paid ~ Rs 85 crore earlier
- Vi: Paid about Rs 30 Crore Earlier
These were adjusted in their first parcels.
Payment Options and Installment Plans
DoT had seek full payment of money from telcos via demand Notices on July 16.
- Installment: Payment over 20 equal years.
The thing is, since no company had a tangible lead in interest rates compared to the other two operators all three opted for an installment plan.
Spectrum Allocation Status Post Payments
With payments made, DoT now begins the process of frequency allocation.
Next Steps for Radiowaves
Both Airtel and Vi have refurbished their airwaves spectrum bandwidths but in all likelihood, these would be put only to similar use. The officials said allocation of the new airwaves bought by these firms shall take place within 30 days.
5G Spectrum Auction Details
The 5th generation airwaves were sold through an auction that completed on June 26 but with differing degrees of interest shown by the leading incumbents:
- Bharti Airtel: grabbed around Rs talents from spectrum reduction amounting to about Rs 6,856.76 crore worth of five junior companies as largest buyers.
- Vodafone Idea: Acquire 30 MHz of 5G spectrum for Rs 3,510.40 crore from the second-highest bought pub.
- Reliance Jio: Bought a bit of 5G spectrum at the cheapest-ever price in the auction.
Government Revenue and Auction Highlights
India’s second 5G spectrum sale garnered Rs. The airwaves on the block were worth Rs 96,238.45 crore at floor prices but due to fierce competition and muted aggression in bidding (just seven rounds took place over five days), it resulted in proceeds just a little less than one-eighth of the outlay -around 12%.
Compared to the first 5G spectrum sale two years ago that fetched over Rs 1.5 lakh crore, telcos this time shunned key bands like C-band (3.3 GHz), high band (26 GHz), sub-GHz -sheepishly returning much of it in frequencies such as 800 MHz and sweeter points among others! One of the reasons, telcos already have a large stock (enough quantum) of 5G airwaves at high prices in the July 2022 auction.
Consequences for the Telecomco Business
This payment and exercise of spectrum is significantly crucial to retaining 5G services concerned that launch or empowerment in India. The telecom industry is ready for another round of growth and competition with Airtel, Vi renewing their airwaves & Jio buying strategically.
Conclusion
The payment of over Rs 1,000 crore as the first installment by major telecom operators is an important stage in India’s road to expanding the area base covered by 5G technology. With the DoT making progress with spectrum allocation, we believe that this will eventually help in boosting services and infrastructure upgradation thereby paving the way for superior telecom facilities throughout India.