Reliance Jio, Airtel, Vodafone Idea to Buy Spectrum Worth Rs. 71,000 Crore in 5G Auction: Report

The government will next month auction about Rs. 4.3 lakh crore worth of airwaves capable of offering fifth-generation or 5G telecom services.

By Press Trust of India | Updated: 23 June 2022 05:14 IST

Reliance Jio, Airtel, Vodafone Idea to Buy Spectrum Worth Rs. 71,000 Crore in 5G Auction: Report

Jio and Bharti may bolster their sub-1GHz holdings

Highlights

Government to auction about Rs. 4.3 lakh crore worth of airwaves
Airwaves will offer fifth-generation or 5G telecom services
Telecoms may give the premium 700MHz band spectrum a miss

The three private telecom operators — Reliance Jio, Bharti Airtel and Vodafone Idea — are expected to buy spectrum worth Rs. 71,000 crore in the upcoming 5G auction, leaving a vast majority of the radiowaves going under the hammer unsold, according to research firm IIFL Securities.

The government will next month auction about Rs. 4.3 lakh crore worth of airwaves capable of offering fifth-generation or 5G telecom services, including ultra-high-speed internet.

According to the report released on Wednesday, the government's in-principle nod to allocate spectrum directly to enterprises is going to have an adverse outcome of the mega auction.

Telcos, Wi-Fi Providers Should Collaborate for Biz Models, Says TRAI Chief

"While supply is abundant, the government has not cut TRAI's proposed reserve prices despite telcos' assertion that these were still high. We see telcos bidding only for four of the 10 bands and spectrum should be sold at base price. We estimate spectrum outlay of Rs. 37,500 crore, Rs. 25,000 crore and Rs. 8,500 crore for Jio, Bharti and Vi," IIFL said.

The research firm further said if all telecom operators avail the option of equal annual installments over 20 years, the government would receive Rs. 6,200 proceeds in the current financial year.

It said telcos may give the premium 700MHz band spectrum a miss as they await further reserve-price cuts. Jio and Bharti may bolster their sub-1GHz holdings by bidding for the 850MHz and 900MHz bands, respectively.

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"We do not assume any bids in the 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz bands. Bids for 3.6GHz are somewhat tricky to predict," it said.

The report further said telcos could bid for small quantities in the 3.6GHz and 28GHz band — seen as the prime radiowaves for 5G technology — as it can lead to large savings in spectrum usage charges.

DoT Launches Design-Led Scheme, Extends PLI Duration for 5G Spectrum

The Department of Telecom (DoT) has issued a new order that will enable telecom operators to reduce spectrum usage charges proportionately on buying fresh radiowaves in the upcoming 5G auction.

Why is 5G taking so long? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

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