India’s first auction of 5G spectrum, that powers ultra-high data speeds, is currently underway with a total of 72 GHz (gigahertz) of radiowaves worth at least Rs. 4.3 lakh crore up for bidding.
Mukesh Ambani’s Reliance Jio, Sunil Mittal-led Bharti Airtel, Vodafone Idea and a unit of 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 connectivity, and can enable billions of connect devices to share data in real-time.
In addition to powering ultra-low latency connections, which allow downloading full-length high-quality video or movie to a mobile device in a matter of seconds, Fifth Generation or 5G would enable solutions such as e-health, connect vehicles, with more immersive augmented reality and metaverse experiences, life-saving use cases, and advance mobile cloud gaming among many others.
The auction is being held for spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz), and high (26 GHz) frequency bands.
The bidding war which start at 10:00 hrs will continue till 18:00 hrs and will carry over into the next day, if there exists a demand for spectrum and bidders are putting in bids.
The number of days the auction ultimately stretches to will depend on the actual demand for radiowaves 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 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 will lead the spends, follow by Bharti Airtel, while analysts see limited participation from Vodafone Idea, and Adani Group.
Reliance Jio has submit 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 mute and limited spectrum demand from its side.
Bharti Airtel has put in Rs. 5,500 crore as EMD, and Vodafone Idea the amount is at Rs. 2,200 crore.
While the earnest money deposit suggests that Jio could be the most aggressive bidder, Adani Group may be looking to buy the bare minimum spectrum needed to set up a private network.
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 telcos target specific amounts of spectrum in various circles.
Market watchers say that a telco has the ability to go after radiowaves worth up to 7-8 times the EMD amounts submit by them, although players do tend to keep headroom for maneuvering and flexibility, base on how auction proceeds and the strategy adopt 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.
Also, 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.
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 deposit earnest money amount of Rs 10,000 crore, and Bharti Airtel and Vodafone Idea deposited Rs 3,000 crore and Rs 475 crore, respectively.
In the auction conduct in 2021, that had last two days, Reliance Jio come 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.
