The 5G spectrum auctions has come to a close at the end on the seventh day of the sale with the government set to net a record over Rs 1.5 trillion. Reliance Jio emerged as the most aggressive bidder, followed by Bharti Airtel and Vodafone Idea Limited (Vi) bidding for 5G airwaves in its priority circles. Besides, Adani Data Networks is said to have bid for 5G airwaves in the 26 GHz band to be used for its captive private networks.

The auctions over the last few days was driven by healthy bidding for 1800 MHz airwaves in the key Uttar Pradesh (UP) East circle. The per unit price of 1800 MHz spectrum in UP-East circle jumped to Rs 1.60 billion, almost 76.5 per cent higher than its Rs 910 million per MHz base price.

In the auctions conducted by the Department of Telecommunications (DoT), Reliance Jio acquired spectrum in the 700MHz, 800MHz, 1800MHz, 3300MHz and 26GHz bands. The acquisition of the right to use this spectrum will enable Jio to build the most advanced 5G network. Through the spectrum acquisition in the auction, Jio’s total owned spectrum footprint has increased significantly to 26,772 MHz (uplink+downlink), highest in the country.

Commenting on the 5G spectrum auction proceedings, Akash M Ambani, chairman, Reliance Jio Infocomm, said, “We have always believed that India will become a leading economic power in the world by adopting the power of breakthrough technologies. This was the vision and conviction that gave birth to Jio. The speed, scale and societal impact of Jio’s 4G rollout is unmatched anywhere in the world. Now, with a bigger ambition and stronger resolve, Jio is set to lead India’s march into the 5G era. We will celebrate ‘Azadi ka Amrit Mahotsav’ with a pan India 5G rollout. Jio is committed to offering world-class, affordable 5G and 5G-enabled services. We will provide services, platforms and solutions that will accelerate India’s digital revolution, especially in crucial sectors like education, healthcare, agriculture, manufacturing and e-governance and make another proud contribution to Honourable Prime Minister’s Digital India mission.”

Meanwhile, Bharti Airtel has acquired 19,800 MHz spectrum by securing a pan India footprint of 3.5 GHz and 26 GHz bands. In addition, the company was able to selectively bolster mid-band spectrum. These spectrum acquisition by Airtel was secured for a total consideration of Rs 430.84 billion.

Airtel has secured 5G spectrum for 20 years in this auction. In addition, this spectrum acquisition has enabled Airtel to drastically reduce the payout towards spectrum usage charge (SUC) and eliminate the adverse SUC arbitrage.

Airtel now has the widest mobile broadband footprint across the country making it well-positioned to usher in the 5G revolution in India. It has accumulated the largest pool of low and mid band spectrum (Sub ghz/1800/2100/2300 bands) which can be used to provide the effective 5G coverage while massive capacities in the 3.5 GHz and 26 GHz bands will allow Airtel to create 100x capacities at the least cost.

Additionally, Gopal Vittal, managing director and chief executive officer, Bharti Airtel, said, “Airtel is delighted with the results of the 5G auction. This spectrum acquisition at the latest auction has been a part of a deliberate strategy to buy the best spectrum assets at a substantially lower relative cost compared to our competition. This will allow us to raise the bar on innovation and address the emerging needs of every discerning customer who demands the best experience in India. We are confident that we will be able to deliver the best 5G experience in India in terms of coverage, speeds and latency. This will allow us to change a lot of established paradigms for both our B2C and B2B customers. 5G technology is the revolution that can alter India’s manufacturing, services and several other sectors. We remain fully committed to the Government’s Digital India vision and will continue to do what is needed to ensure that India becomes a beacon for the world in terms of technology.”

Besides, Vi has acquired spectrum in 3300MHz and 26GHz 5G bands. The operator has also acquired additional 4G spectrum acquisition in 3 circles of Andhra Pradesh, Karnataka and Punjab in a bid to improve the customer experience. According to information from the government, Vi bid along expected lines for spectrum amounting to Rs 187.99 bilion.

Further, Adani Data Networks has bought 400 MHz of the 26GHz band (mmWave) across six circles for Rs 2.12 billion in the latest spectrum auction, indicating that it intends to use the airwaves for captive networks across the conglomerate’s businesses. The new entrant bought airwaves in the service areas of Gujarat, Mumbai, Andhra Pradesh, Karnataka, Tamil Nadu and Rajasthan. Meanwhile, the company is in the process of acquiring a unified licence for international and national long distance telephony and Internet services for the Gujarat circle, implying its focus on the geography for deploying the airwaves acquired through the auction.

The recently concluded 5G spectrum auction witnessed healthy bidding for 26GHz band from all participants, owing to its utility for captive networks and the scrapping of spectrum usage charge from the current auctions. As much as 72 per cent of the spectrum on offer in this band received bids in the 5G spectrum auctions.


Industry reaction:-

As per Ankit Jain, vice president and sector head, ICRA Limited, said, “The spectrum auction results have exceeded ICRA’s estimates and have fetched the exchequer around Rs 1501.73 billion of which around Rs 134 billion are to be paid upfront. This is the highest ever spend on spectrum auctions, partly driven by upgradation in technology to 5G and partly by relaxed payment terms. This amount will be in the form of a 20-year deferred spectrum debt at a 7.2 per cent interest rate, which eases the repayment burden for the industry for this auction. Reliance Jio was the most aggressive bidder, acquiring spectrum worth more than Rs. 880.78 billion, followed by Bharti Airtel at Rs 430.84 billion, Vi at around Rs 187.99 billion and Adani Data Networks at Rs 2.12 billion. 3300 MHz band along with the 26 GHz bands were the most sought after, which will enable the operators to launch 5G services. Further, the 700 MHz band which went unsold in the last two auctions, witnessed participation, wherein Jio bought 10 MHz across all 22 circles. While there was no participation in the 600 MHz band and 2300 MHz band, the participation in 900 MHz, 2100 MHz and 2500 MHz bands was muted. While 3300 MHz band will be crucial for 5G technology deployment going forward, the appetite for 1800 MHz band stems from the rising mobile broadband usage and thus the need for improving network capacity. Further, apart from one circle in 1800 MHz band, the spectrum was sold on reserve price only. Further, the quantum of total spectrum sold was 71 per cent of the total value of spectrum on offer, while value wise its only 35 per cent. Post the auctions, the debt levels of the industry would increase further to around Rs 6 trillion as on March 31, 2023, with the addition of the spectrum liabilities. Further, the annual payments towards spectrum liabilities will be around Rs 134 billion for FY’2023 followed by Rs 196 billion for FY’2024 and FY’2025 each, before increasing to Rs 655 billion from FY’2026 onwards.”