India recently concluded the 5G auctions. The net outflow was Rs 1.5 Lakh Cr. RJIO ended up committing to pay Rs 88087 Cr, Bharti Rs 43084 Cr, and VI Rs 18799 Cr. Did you know that the cost to the operators actually turned out to be much lower? But why? This is due to the changed SUC rules. The government, as a part of the telecom package, notified that all spectrum sold in this auction will attach a 0% SUC rate. In order to understand the details of this order, please read my earlier note titled — Will 5G impact SUC, if yes, how? Now, in this note, we will try to estimate the real DCF value of spectrum cost to the operators. This we will do after taking into account the real savings in cash flows in the account of the changed SUC rules.
Calculating Yearly Instalments
In order to estimate the above value, we need to first calculate the yearly installments that each operator will end up paying every year for the value of spectrum that they ended up buying in this auction.
