Despite the fanfare, the Indian Govt won’t meet revenue expectations from its biggest spectrum auction ever

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Despite the fanfare, the Indian Govt won’t meet revenue
expectations from its biggest spectrum auction ever
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The Indian govt is getting ready to hold the biggest ever spectrum auction the country has ever seen- atleast with the amount of spectrum put under the hammer! Latest report from HSBC Global Research point out that govt is unlikely to get the revenue it is expecting from this massive sale of airwaves. Cabinet has finally approved sale of spectrum in frequencies including 1800mhz, 2100mhz, 800mhz and for the first time the premium LTE band, 700mhz band.

Govt expects to earn $83bn if all spectrum put on auction is sold at base price. HSBC Global Research in its reports suggests that the govt will be far from meeting its revenue expectation from the upcoming spectrum auction. The report states that the govt will be able to achieve not more than $10-12bn from the sale of airwaves. Which means a lot of spectrum may remain unsold.

The report says that data bands such as 700mhz, 2300mhz and 2500mhz may not find takers. However there could be good demand for 1800mhz, 2100mhz and operators could be interested in the LTE band 700mhz put on auction for the first time.

While the issue of availability of spectrum has been resolved by the govt this time around by putting under the hammer 2200mhz spectrum, largest ever, the operators seem to have an issue with the pricing of spectrum particularly the 700mhz band. But now that the pricing has been finalized with a final stamp of approval from the cabinet operators are left with no choice but to –not bid if the price is not right!

Image credit: Indiatimes