Why telcos might show limited interest in the upcoming spectrum auction

The reserve price, which is the minimum bid amount, remains largely unchanged, except for a minor increase in some bands like 2,100 megahertz.

India's leading telcos spent nearly ₹1.5 lakh crore at the last auction held in August 2022.

However, limited competition is expected this time with telcos only bidding in circles where their licences are expiring.

For Bharti Airtel, around 42 megahertz of spectrum will be expiring soon, while for Vodafone Idea, it's only about 12 megahertz. For Jio, there are no licences coming up for renewal.

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While there is no pressing need for telcos to bid for fresh spectrum, if they bid only in circles where their licenses are going to expire, then Kotak Institutional Equities expects Bharti to spend roughly ₹3,800 crore, and Vodafone Idea to spend ₹1,500 crore.

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Jefferies expects the demand to be limited to $0.5-2 billion, or a maximum of  ₹16,000 crore.

The absence of 700 megahertz should allay concerns about overspending by Bharti Airtel, which the brokerage firm believes could spend a little over $0.5-1.5 billion.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

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