New Delhi: India ’s largest ever airwaves auction, which could fetch the government over Rs 5 lakh crore as telcos bid for 8,300 MHz of 4G and 5G spectrum, is set to take place in March-April 2020 after the Digital Communications Commission ( DCC ) gave its approval for the spectrum sale on Friday.Telcos and analysts said the starting price of both frequencies (Rs 492 crore per unit for 5G and Rs 6,568 crore per unit for the 700 MHz band — used for 4G) was too high to attract serious bidding, especially given the financial condition of operators. Loss-making Vodafone Idea and Bharti Airtel are battling a serious financial crisis, facing statutory dues of over Rs 53,000 crore and Rs 35,500 crore, respectively, which need to be paid by in just over a month.But analysts said these two companies as well as Reliance Jio will have to again bid for and buy 4G spectrum in circles where their rights over these airwaves are set to expire in 2021. Airwaves in 3,300-3,600 MHz band, earmarked for 5G services, will make their debut in the upcoming sale. The 700 MHz band went unsold in the last sale in October 2016, when government raised Rs 65,789 crore by selling only 40% of the 2,300 MHz airwaves on offer.“The DCC has today approved the recommendation of Telecom Regulatory Authority of India. We are hopeful that auction shall be conducted in March-April,” telecom secretary Anshu Prakash said after a meeting of the DCC on Friday.The DCC’s decision will need to be ratified by the Cabinet.Airwaves across the 4G bands of 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz, besides 5G spectrum in the 3,300-3600 MHz bands, will be offered for sale.Reliance Communications’ airwaves licence in the coveted 800 MHz band which Jio uses under a sharing pact will expire in 18 circles in July-August 2021. Bharti Airtel and Vodafone Idea will also need to buy back their airwaves in eight circles each, but mostly in the less expensive 1,800 MHz band, also used for 4G. These airwaves will be takeb back by the Department of Telecommunications (DoT) after their permits expire and will be once again put up for sale.Mobile phone operators said the exorbitant pricing, insufficient spectrum, and unavailability of newer bands will dampen bidding interest for 5G airwaves. “With spectrum reserve prices 4 to 6 times higher than that of similar spectrum sold recently in several countries, high levels of debt and prevailing financial stress in the sector, telecom service providers will find it very difficult to raise funds to participate in auctions,” said Rajan Mathews, director general of Cellular Operators Association of India (COAI), which represents all three telcos.Carriers said Trai’s suggested base price of Rs 492 crore per unit of 3,500 MHz 5G spectrum is much higher than Rs 65 crore per unit at a recent 5G auction in Korea. The Trai has recommended radiowaves in the block of 20 MHz. Thus, for a purchase of 100 MHz of volume, an operator would need to pay at least Rs 50,000 crore, which is exorbitant for an industry reeling under a debt of over Rs 7 lakh crore, and with only Jio making profits.“It will be prudent to let the sector regain some financial strength from the recent initiatives undertaken before scheduling the auction. The interim period can be used to design and test India-specific 5G use cases,” said Mathews.Mahesh Uppal, director Com First (India) and an expert in spectrum regulatory matters, said that the absence of workable 5G use cases and an immature device ecosystem will also hit demand for 5G spectrum.“One can expect very low-intensity bidding for 5G spectrum, if at all... Such a scenario won’t be in the government’s interest either as the auction would neither generate huge revenues nor encourage rollout of 5G services,” Uppal said.He expects “some appetite for pure 4G airwaves” in some pockets in the 1,800 MHz, 900 MHz and 800 MHz bands since telecom operators are still ramping up countrywide 4G networks. But he ruled out “any serious bidding” for expensive 700 MHz spectrum that can be used for both 4G and 5G services.The government was optimistic about demand for next-gen spectrum, and for the 700 MHz band as well. For 700 MHz, Trai had proposed cutting the base price to Rs 6,568 crore a unit, or Rs 32,840 crore for a block of 5 MHz. In 2016, the starting price was Rs 11,485 crore per MHz and Rs 57,425 crore for 5 MHz.“5G will not be limited for faster mobile broadband access but use cases in industry, medicine, health and education are also likely to come up. We will soon give the airwaves for trials to telecom operators for developing specific India use cases,” Prakash added.For the upcoming sale, successful bidders for sub 1 GHz band spectrum will have to pay 25% upfront, and 50% upfront for higher frequency bands.However, in cases where spectrum is currently not available with the DoT, winners will have to make 10% of the upfront payment in case of sub 1 GHz bands and 20% upfront payment in cases of higher frequency bands.