After the high-profile 600MHz spectrum auction in the U.S. earlier this year failed to find much favor with telecom operators in the country, the 2016 spectrum auction in India ended yesterday with a similar lukewarm response from the participating carriers. Combined bids amounted to just Rs. 657.89 billion ($9.9 billion) after five days of bidding, and while that in itself was roughly in line with JP Morgan's projection, it was still significantly below than the Rs 5.63 trillion ($84 billion) that the government had hoped to mop up through the process. The numbers fell short of expectations mostly because the carriers made a collective decision not to bid on the 700 and 900 MHz airwaves that were expected to fetch the big bucks for the government, but were largely shunned because of their high reserve prices. The 700MHz spectrum alone had a base price of Rs. 4 trillion ($60 billion).
While the carriers avoided bidding on the lower frequency 700 and 900 MHZ bands altogether, the 1800 and 2300 MHz bands were much in demand, with telecom operators in the country filling up gaps in their spectrum holdings to provide better services to their customers following the high-profile recent launch of Reliance Jio Infocomm. The country's largest telecom company, Airtel, announced that it acquired 173.8MHz of spectrum out of the 965MHz that have been snapped up by the competing carriers over the past five days. According to a statement released by the company, it bought spectrum in the 1,800, 2,100 and 2,300MHz bands for a total of Rs 142.44 billion ($2.2 billion). The second-largest operator in the country, Vodafone, bought spectrum worth more than Rs. 200 billion ($3 billion), while the No. 3 player, Idea, spent Rs. 127.98 billion ($4.2 billion) for 349.20MHz in the 800, 2,100, 2,300 and 2,500MHz bands.
The new poster-boy of Indian telecom, Reliance Jio, also bagged around 269.9MHz in the 800, 1,800 and 2,300MHz bands for a combined price of Rs. 136.72 billion ($2.1 billion). Most of the spectrum that went under the hammer over the past five days is expected to be used for 4G LTE data services, although some of it will be used for voice services as well. While the finance ministry put up a brave front officially describing the auction as "successful" and calling it a "big achievement" for the government, the fact still remains that only five of the seven frequencies on offer saw any bids with the highly-influential telecom lobby, COAI (Cellular Operators Association of India), blaming the lack of interest on the high reserve price of the remaining frequencies and urging the government to address the pricing of the 700MHz band "on a priority basis".