Why 700 MHz Band Didn’t Find Any Takers

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The spectrum auction that was touted to be the biggest sale yet with expected revenue for the government pegged at Rs 5.6 lakh crore ended with fetching just 11.6% of it to the exchequer with 700 MHz band not bringing even a penny.

The government, at the end of the auction, could manage to earn only Rs 65,789 crore, from all the seven bands it put up for sale. Though spectrum bands like 1800 MHz and 2300 MHz were the favorites among the bidders, industry was closely watching the reaction to the much pricey 700 MHz band.

The reserve price for the 700 MHz band was fixed at Rs 11,485 crore, almost four times than the cost of 1800 MHz and three times than the 2300 MHz.

Unfortunately, none of the seven bidders show any interest in the 700 MHz band, one of the most spectrum efficient airwaves.

The writing was on the wall, says the industry.

“The auction is on the expected lines- no bidding on 700 MHZ,” said Prashant Singhal, Global telecom leader, EY on the lackluster performance of the band.

Almost every stakeholder of the industry unanimously cited the high reserve price as the reason for the poor performance of the 700 MHz band.

“The financial strain on the industry and a high reserve price are the major reasons why the 700 MHz band did not attract bidders,” COAI, the GSM operators’ industry body, said Thursday.

Similar was the sentiment with Airtel.

The country’s top operator said the band did not get any bid as it made ‘no economic case’ for them based on the high reserve price. The company said to accelerate India’s progress to the top league of digitally enabled nations, country’s top3 to 4 pan india operators hould have robust 700 MHz band based network.

“Therefore, the pricing of the 700 Mhz band spectrum needs to be addressed on priority for the nation to benefit from the digital dividend arising out of this high quality spectrum band,” Airtel said in a statement.

Industry body COAI too latched on to this opportunity to suggest the government to lower the reserve price of the 700 MHz band.

“We are hopeful the Government and the DoT will take cognizance of the role a high reserve price had on bidding, as far as the 700 MHz is concerned, and will recalibrate the price so that spectrum in the band could be put up for auction, maybe two years from now,” COAI DG RAjan S Mathews said.

A total of 2354.55 MHz spectrum was put up for sale of which only 964.80 MHz got sold during the current spectrum auction.

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