How Much Spectrum Actually Will be Sold in India's Upcoming Auction?

Some have speculated, and few have hoped, that a huge spectrum auction--representing as much as 2200 MHz of spectrum, would generate about $83 billion in revenues for the Indian government. That auction of 700 MHz, 800 MHz, 1800 MHz, 2300 MHz and 2500 MHz bands for 4G, and 2100 MHz for 3G, might result in more spectrum being acquired in the 800 MHz and 1800 MHz bands than 700 MHz.

But some industry analysts expect far less spending than that. In fact, some estimate the spectrum sale could generate only $10 billion to $12 billion, leaving much of the spectrum unsold. Some think much of the unsold inventory will be in the 700-MHz range.

Rajiv Sharma, telecom analyst at HSBC, said the government's auction revenue targets are overly ambitious and "based on unrealistic expectations" as it expects to raise a whopping $83 billion, which is 2.8 times the telecom sector's present revenues.

"None of the existing incumbent carriers have the balance sheet to bid for pan-India 700 MHz spectrum at current prices, and we believe a lot of 4G spectrum might remain unsold in the 700 MHz, 2300 MHz and 2500 MHz bands," said Sharma. "We see good demand for 1800 MHz, selective demand for 2100 and 700.”