5G Spectrum India Auction Begins: Reliance Jio, Bharti Airtel, Vi & Gautam Adani Among Top Bidders

New Delhi: India’s first auction for 5G spectrum, which provides ultra-high data speeds, is currently underway with a total of 72 GHz (gigahertz) airwaves worth at least Rs 4.3 lakh crore up for bid. 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 bidding race for 5G spectrum, which offers speeds about 10 times faster than 4G, lag-free connectivity , and could allow billions of connected devices to share data in real time. 5G spectrum auction to begin today; Reliance Jio, Bharti Airtel Among 4 in Fray.

In addition to powering ultra-low-latency connections that allow a full-length high-quality video or movie to be downloaded to a mobile device in seconds (even in congested areas), the fifth generation or 5G would enable solutions such as e-health, connected vehicles, more immersive augmented reality and metaverse experiences, life-saving use cases and advanced mobile cloud gaming among 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), medium (3300 MHz) and high (26 GHz) frequency bands. Bidding, which began at 10:00 AM, will continue until 6:00 PM and will carry over to the next day if there is demand for spectrum and bidders place bids.

The number of days the auction ultimately extends to will depend on actual demand for airwaves and the strategy of individual bidders, although broad industry consensus is that it could last up to two days. Although a total of 72 GHz (gigahertz) spectrum worth at least Rs 4.3 lakh crore was put on the block for the auction, market watchers do not expect intense bidding given that there is a lot of spectrum in the block and there are four bidders in the competition.

The Department of Telecom’s own internal estimates put the 5G tender at Rs 70,000 crore to Rs 1,00,000 crore. Jio is expected to lead spending, followed by Bharti Airtel, while analysts see limited participation from Vodafone Idea and Adani Group. Reliance Jio submitted an earnest money deposit (EMD) of Rs 14,000 crore, the highest among the four players in the spectrum bidding. Adani Data Networks’ EMD size stands at Rs 100 crore, indicating muted and limited demand for spectrum on its part. 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 hefty cash deposit suggests Jio, the country’s largest telco by subscribers, could be the most aggressive bidder in the pack, the Adani Group could be looking to buy the minimum spectrum needed to set up a private network. Usually, serious deposits give an indication of players’ appetite, strategy and plan to collect spectrum in an auction. It also defines the eligibility points through which telcos target specific amounts of spectrum in different circles.

Market watchers say a telco has the ability to chase airwaves worth up to 7-8 times their EMD amounts, though players tend to retain leeway and flexibility based on how the auction plays out and the strategy adopted by competitors. Based on EMD, market watchers say Jio could technically place bids worth Rs 1.27 lakh crore, Bharti Airtel up to Rs 48,000 crore, Vodafone Idea (VIL) around Rs 20,000 crore and Adani Data around Rs 700 crore Rs.

“We expect Reliance Jio to improve its spectrum in 800MHz and 1800MHz bands to 10-15 MHz in each market. We also expect Jio to buy a minimum of 100 MHz in the 3.3 GHz band and 800 MHz in the 26 GHz band in all markets,” Jefferies was quoted as saying in a July 20 note. It also expects Bharti Airtel to bid for 100 MHz of spectrum in the 3.3 GHz band and 800 MHz of 26 GHz spectrum, allowing it to immediately reduce its SUCs (Spectrum Usage Charges).

“We also expect some purchases in the 900/1800 MHz bands to cover the renewal and completion of 5/10/15 MHz blocks in several markets. Bharti can also enhance its spectrum in 2300 MHz in the six markets where the spectrum is available,” Jeffries said.

He saw the Adani Group’s purchases as likely to be limited to 100MHz in the 26GHz band.

In the previous auction held in early 2021, Reliance Jio Infocomm had deposited an assured cash amount of Rs 10,000 crore, while Bharti Airtel and Vodafone Idea had deposited Rs 3,000 crore and Rs 475 crore respectively. In the auction held last year – which lasted for two days – Reliance Jio picked up spectrum worth Rs 57,122.65 crore, Bharti Airtel bid around Rs 18,699 crore and Vodafone Idea bought spectrum worth Rs 1,993.40 crore.