The government must take a relook at spectrum auction formats, unrealistic pricing, and regulatory norms
India’s latest auction of telecommunications spectrum is a qualified success from the Centre’s perspective, mainly because the winning bids cumulatively exceeded the government’s own low expectations for receipts from the sale of airwaves. A total of 855.6 megahertz was successfully bid for — out of the 2,308.8 MHz that was on offer — as the three largest telecom services providers sought to optimise their purchases of radio spectrum by seeking to acquire only what they deemed essential airwaves, either as renewal or for strengthening their network, while entirely avoiding costlier bandwidth offerings. The newest entrant to the industry, Reliance Jio, was also the most acquisitive, as the Reliance Industries unit accounted for close to 60% of the spectrum bought at 488.35 MHz and contributed almost three-fourths of the ₹77,815 crore that the Department of Telecommunications garnered from the sale. That Jio’s ₹57,123 crore by itself surpassed the government’s estimate of ₹45,000-₹50,000 crore for takings from the auction where the reserve price for the entire spectrum on offer across seven bands amounted to about ₹3.92-lakh crore, tells its own tale. Clearly cognisant of the prevailing overall economic circumstances amid the COVID-19 pandemic as well as the high level of indebtedness in the industry, the government appears to have tempered its expectations to a more realistic level. Still, the Centre can hardly be sanguine about an outcome where a mere 37% of the airwaves on offer found takers.