స్పెక్ట్రమ్ అమ్మకం రూ .10,000 కోట్ల ప్రారంభ చెల్లింపును మాత్రమే పొందవచ్చు – ఎకనామిక్ టైమ్స్

చూడవలసిన స్టాక్స్: టాటా స్టీల్, అవును బ్యాంక్, బ్రిటానియా, ఎన్‌టిపిసి, ఇండియాబుల్స్ హౌసింగ్ – లైవ్‌మింట్
February 10, 2020
బ్రిటిష్ ఎయిర్‌వేస్ రికార్డ్ ఫ్లైట్ చేస్తుంది, అట్లాంటిక్‌ను 5 గంటలలోపు దాటుతుంది – హిందూస్తాన్ టైమ్స్
February 10, 2020

స్పెక్ట్రమ్ అమ్మకం రూ .10,000 కోట్ల ప్రారంభ చెల్లింపును మాత్రమే పొందవచ్చు – ఎకనామిక్ టైమ్స్


Translating…

MUMBAI: The government may generate upfront payments of only around Rs 10,000 crore from spectrum auctions in the next fiscal year starting April 1, given the financial challenges faced by two major telcos

Vodafone Idea

and

Bharti Airtel

, telecom department officials have estimated.

This implies that the next

spectrum sale

could fetch it only around Rs 35,000-40,000 crore overall as against the Rs 5.86 lakh crore worth of airwaves that the government wants to put on sale at base price, experts said.

Telcos pay upfront 25% for the sub-1 GHz band and 50% for higher bands they win in auctions. The balance is paid over 16 years in equal instalments.

Senior officials told ET that loss-making mobile phone operators Vodafone Idea and Bharti Airtel — facing a combined Rs 89,000 crore in new statutory dues — are expected to give the 5G spectrum a miss in the upcoming sale planned in March-April.

BCCL – Non Copyright

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Airtel, though, is likely to pick up some 4G airwaves, especially in eight circles where its permits are expiring.

“Of the three players,

Jio

may take some 5G spectrum but not much, besides some 4G. We expect it will do so to get the firstmover advantage,” said a government official, who did not want to be named.

Loss-making Vodafone Idea, facing a survival threat and in the midst of a costly integration process, is expected to largely give the auctions a miss, officials said.

Spectrum Renewal Hopes

This means without the adjusted gross revenue dues, the government will fall way short of its Rs 1.33 lakh crore budgeted for the next fiscal year, with only Rs 20,000-25,000 crore expected to come from licence fees and spectrum usage charge.

Airwaves across the 4G bands of 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2100 MHz, 2300 MHz and 2500 MHz, besides 5G spectrum in the 3300-3600 MHz bands, will be offered to Vodafone Idea, Bharti Airtel and Reliance Jio.

The

auction

, expected in the first quarter of the next fiscal year, will see some 8,293.95 MHz of airwaves at an estimated total base price of Rs 5.86 lakh crore.

These numbers, however, look very optimistic.

‘Unrealistic Pricing’

“The government planning an auction is commendable, however, given the reserved prices for the most sought-after bands and the present financial condition of the industry, we do not believe the government will be able to garner any more than Rs 6,000-7,000 crore as upfront payment,” said Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), which represents all private telcos.

“This is not to negate the fact that there are tremendous opportunities in India, but what is getting in the way is the unrealistic pricing of the key spectrum bands that are for 5G, and the 700 MHz band,” Mathews added.

The government had cleared a base price for 5G airwaves at Rs 492 crore per MHz and proposed the sale of a minimum 20 MHz blocks, which would mean a telco would have to spend close to Rs 50,000 crore for 100 MHz — the quantum it needs to offer quality 5G services.

For the 700 MHz band, which was unsold at the previous auction, the DoT has cut the base price by 43% to ?6,568 crore a unit, or ?32,840 crore for a block of 5 MHz.

Telcos have described the rates as expensive.

Earlier this week, Bharti Airtel CEO Gopal Vittal reiterated in an earnings call that the 5G airwaves were priced too high. “…we will not pick it up at those prices”, he said.

Previously, Vodafone Idea and Reliance Jio had termed the 5G base prices as too expensive.

“At the stage that we are in and where there is tremendous pressure based on their financial health, the upcoming auctions are expected to be muted,” said Prashant Singhal, global technology, media and telecommunications (emerging markets) leader at EY.

Spectrum Renewal

All hopes are pinned on spectrum renewal.

“The best case for the government is to realise value from spectrum renewals from the incumbents, and this may help the government raise Rs 25,000 crore at most, of which Rs 10,000 crore may accrue in FY21. Over and above this has to be 5G spectrum auction, which seems very unlikely given the ecosystem and spectrum pricing,” said Rajiv Sharma, head of research at SBICap Securities.

If there is a 50% reduction in current 5G prices, then there may be some interest for 3,500 MHz and another Rs 20,000 crore could be raised in the fiscal year starting April 1, 2021, he said.

“So, to sum up, spectrum auction is not going to be more than Rs 35,000 crore,” Sharma said.

Already weighed down by debt of over Rs 7 lakh crore, loss-making telcos Bharti Airtel and Vodafone Idea are now facing over Rs 35,000 crore and Rs 53,000 crore, respectively, in adjusted gross revenue dues after a Supreme Court order last October.

Both have filed a plea in the top court to be allowed to negotiate with the DoT on longer timelines and modalities for payment, in a bid to soften the financial blow. The court has yet to hear the matter.

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