India‘s first auction of 5G spectrum, that powers ultra-high data speeds, is currently underway with a total of 72 GHz (gigahertz) of radio waves worth at least Rs. 4.3 lakh crore up for bidding.
Billionaire Mukesh Ambani’s Reliance Jio, Sunil Mittal-led Bharti Airtel, Vodafone Idea and a unit of billionaire Gautam Adani’s flagship Adani Enterprises are in the race to bid for 5G spectrum, that offers speeds about 10 times faster than 4G, lag-free con
As well as fuelling super low dormancy associations, which permit downloading full-length high quality video or film to a mobile phone in no time flat (even in jam-packed regions), Fifth Generation or 5G would empower arrangements like e-health, associated vehicles, more-vivid expanded reality and metaverse encounters, life-saving use cases, and high level portable cloud gaming among others.
The closeout is being held for range in different low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz), and high (26 GHz) recurrence groups.
The auction which began at 10:00 hrs will go on till 18:00 hrs and will persist into the following day, on the chance that there exists an interest for range and bidders are placing in offers.
The number of days the auction ultimately stretches to will depend on the actual demand for radio waves and the strategy of individual bidders, although the broad industry consensus is that it may last up to two days.
While a total 72 GHz (gigahertz) of spectrum worth at least Rs. 4.3 lakh crore has been put on the block for the auction, market watchers do not expect an intense bidding given that plenty of spectrum is on the block, and there are four participants in the race.
Department of Telecom’s own internal estimates put the 5G auction mop up at Rs. 70,000 crore to Rs.1,00,000 crore.
Jio, it is expected, will lead the spends, followed by Bharti Airtel, while analysts see limited participation from Vodafone Idea, and Adani Group.
Reliance Jio has submitted an earnest money deposit (EMD) of Rs. 14,000 crore, the highest amongst the four players in fray for spectrum bidding. The EMD amount of Adani Data Networks stood at Rs. 100 crore, indicating a muted and limited spectrum demand from its side. Bharti Airtel has put in Rs. 5,500 crore as EMD, while for Vodafone Idea the amount stands at Rs. 2,200 crore.
While the earnest money deposit suggests that Jio, the nation’s largest telecom company by subscribers, could be the most aggressive bidder in the pack, Adani Group may be looking to buy the bare minimum spectrum needed to set up a private network.
Typically, earnest deposits give an indication of players’ appetite, strategy and plan for picking up spectrum in an auction. It also determines the eligibility points, through which Telco’s target specific amounts of spectrum in various circles.
Market watchers say that a Telco has the ability to go after radio waves worth up to 7-8 times the EMD amounts submitted by them, although players do tend to keep headroom for manoeuvring and flexibility, based on how auction proceeds and the strategy adopted by rivals.
Based on EMD, market watchers say, Jio can technically place bids worth Rs. 1.27 lakh crore, Bharti Airtel up to Rs. 48,000 crore, Vodafone Idea (VIL) about Rs. 20,000 crore and Adani Data about Rs. 700 crore.
“We expect Reliance Jio to enhance its spectrum in 800MHz and 1800MHz bands to 10-15 MHz in each market. We also expect Jio to buy a minimum 100 MHz in 3.3 GHz band and 800 MHz in 26 GHz band across all markets,” Jefferies had said in a note on July 20.
Further, it expects Bharti Airtel to bid for 100 MHz of spectrum in the 3.3 GHz band and 800 MHz of 26 GHz spectrum enabling it to lower its SUC (Spectrum Usage Charges) immediately.
“We also expect some purchases in 900/1800 MHz bands to cover for renewals and for completion of blocks of 5/10/15MHz in a few markets. Bharti may also enhance its spectrum in 2300 MHz in the six markets where the spectrum is available,” Jefferies opined.
It saw Adani Group’s purchases likely limited to 100MHz in the 26 GHz band.
In the previous auction held in early 2021, Reliance Jio Infocomm had deposited earnest money amount of Rs 10,000 crore, while Bharti Airtel and Vodafone Idea deposited Rs 3,000 crore and Rs 475 crore, respectively.
In the auction conducted last year – that had lasted two days – Reliance Jio picked up spectrum worth Rs 57,122.65 crore, Bharti Airtel bid about Rs 18,699 crore, and Vodafone Idea bought spectrum worth Rs 1,993.40 crore.