The Modi-government is set to launch its much anticipated 5G spectrum auction on Tuesday, offering radio waves valued at ₹96,000 crore across eight frequency bands.

However, analysts predict a subdued response from the three participating telecom operators - Reliance Jio, Bharti Airtel, and Vodafone Idea.

Experts suggest bids may only reach around ₹12,500 crore, translating to roughly 13 per cent of the total spectrum on offer.

This muted response is a stark contrast to the record-breaking auction in 2022, which saw bids exceeding reserve prices because of the novelty of 5G spectrum.

Antique Stock Broking in a report said, “Overall, about 17 per cent of the spectrum value is likely to be sold, which could be the lowest in any auction since 2014.”

The earnest money deposit (EMD) of ₹4,350 crore indicates a picture of cautious participation. Reliance Jio leads with ₹3,000-crore deposit, while Bharti Airtel and Vodafone Idea deposited ₹1,050 crore and ₹300 crore, respectively.

The maximum limit for bids is 12 times the earnest money deposited by the company, according to the auction rules of the Telecom Regulatory Authority of India.

Analysts believe Airtel and Vodafone Idea will primarily focus on renewing expiring licenses in select circles, while Jio may target spectrum additions in the 800 Mhz band to enhance its coverage. Jio is expected to spend around ₹3,700 crore “as it may increase its spectrum holding in certain circles in the band,” said a sector watcher.

Airtel could spend a minimum of ₹3,800 crore as it will have to renew 42 Mhz of spectrum in the 1800 Mhz and 900 Mhz bands in six circles, Jefferies said in a note.

It may also bid in certain circles to increase its holding in the 800 Mhz/1800 Mhz bands to 10-15 Mhz, and in the 2300 Mhz band to 40 Mhz. This could lead to a maximum spend of ₹12,300 crore.

Vodafone Idea, which recently raised ₹18,000 crore from what was the country’s largest follow-on public offer, has decided against renewing some its spectrum in the circles of Bengal and Uttar Pradesh West, where renewals for 12 MHz in the 1800 Mhz and 900 Mhz bands were due.