There May Not be a Bidding War for 5G Spectrum Auctions Because There is 'Enough' for Everyone

The government has been banking on a large profit from the sale of 5G spectrum to boost its revenues, but experts say it should be cautious and not expect a repeat of the 4G spectrum auctions. The auctions for 5G spectrum are set to begin on July 26, 2022.

All three major telcos – Reliance Jio, Airtel, and Vodafone Idea – have tested and demonstrated that their networks are 5G ready. However, the government has delayed the auctions in order to resolve the ongoing issue of AGR dues.

The telecom ministry and regulator in India acted quickly to expedite the auction process. However, its first stumbling block occurred when telcos petitioned the government for a 90% reduction in base spectrum prices. However, the government only reduced them by 40%.

The government is counting on spectrum auctions to fill its coffers at a time when the fiscal deficit in April and May has risen to 12% of the budgeted estimate, up from 8% in the same period last year.
The LIC IPO fizzled out, rising inflation, and the Rupee hitting record lows in the last week, resulting in a loss of billions of dollars in forex reserves - there are several reasons for the government to extract as much as possible from the telcos.
However, given the way 5G spectrum usage policies are shaping up, a bumper harvest like the one seen with 4G appears unlikely.