Jio may commit up to Rs60,000 crore for 5G auctions; Airtel Rs50,000 crore

13 Jul 2022 , 01:31 PM

According to news reports, Reliance Jio Infocomm and Bharti Airtel are anticipated to submit bids for 5G spectrum valued at Rs55,000—60,000 crore and Rs45,000—50,000 crore, respectively, in the airwaves sale beginning on July 26.

In turn, the cash-strapped Vodafone Idea (Vi) and the Adani group, through its subsidiary Adani Data Networks, may submit bids for spectrum valued at Rs13,000—15,000 crore and Rs5,000—6,000 crore, respectively.

Experts anticipate a competitive three-way battle for 5G airwaves between India’s top telco Jio, Airtel, and newcomer Adani, especially in the sought-after but pricey 3.3-3.67 GHz band, often known as the C-band or mid-band. This can raise the cost of the band by 10% over the initial base price of Rs317 crore per unit.

They also anticipate that Vi and all three businesses will submit bids for the considerably less expensive but useful 26 GHz spectrum.
Jio and Airtel may have made earnest money deposits (EMDs) of Rs6,500—7,500 crore and Rs6,000—7,000 crore, respectively, according to news reports regarding telco spectrum bidding.

Experts anticipate deposits of Rs2,000—2,500 crore and Rs600—700 crore from Adani and Vi, respectively.

The deposits are a component of the four’s applications to take part in the 5G auction, but they have not yet been made public. If these projections are accurate, the estimated Rs4.3 lakh crore worth of 5G airwaves up for auction this year could only bring in about Rs1.3 lakh crore for the government.

As it grants the application eligibility points, which are based on which it can target a particular quantum of airwaves in select or all available bands in specified or all circles, the quantity of EMD is indicative of a company’s bidding strategy and spectrum buying capacity. According to analysts, a telecom can normally target spectrum in the 5G sale that is worth up to eight times their individual EMDs.

A senior industry executive with knowledge of bidding tactics told ET that he/she, predicts Jio would increase its spectrum holdings in the 800 MHz, 1800 MHz, and 2300 MHz bands in addition to the two core 5G bands (3.3 GHz and 26 GHz), in order to have a balance of capacity and coverage.

In addition, he anticipates that Sunil Mittal-led Airtel will add strategic amounts of spectrum in the 900/1800/2300 MHz bands to expand network capacity, as 5G rollouts are anticipated to drastically raise data consumption levels and add to network pressure.

In addition to the 26 GHz range, Vi can selectively mop up airwaves in the 900/1800 MHz bands. Vi’s willingness to bid will be limited by the fact that it has not yet finished its protracted Rs20,000 crore equity and loan fundraising, according to experts.

In frequency ranges ranging from low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300, 2500 MHz) and mid (3.3-3.67 GHz) to high, the Center intends to auction 72 GHz of spectrum valid for 20 years (26 GHz).