5G – Reliance Jio, Airtel, Vi and Adani can bid up to 9X your deposits; thus offering INR 1.26 Lakh Cr, INR 49,500 Cr, INR 19,800 Cr and INR 900 Cr, respectively. With Vi’s continuing financial difficulties, the telecommunications company is not expected to spend much during the auction. While Reliance Jio is looking at mid-range spectrum for mass consumption, Adani’s INR 100 Cr deposit is likely to be for high-range spectrum for private use.
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The long awaited 5G spectrums auction will start on Tuesday July 26, 2022 & a total of 72 GHz of spectrums will be auctioned, with a validity period of 20 year.
At the base price, the spectrum is valued at INR 4.3 Lakh Cr. Reliance Jio, idea, Airtel, Vodafone Idea & Adani Group will compete against each other during the auctions.
All four players have reportedly already deposited INR 21,800 Cr, with Mukesh Ambani’s Reliance Jio depositing around 65% INR 14,000 Cr. Adani Group, a first-time entrant into the telecom sectors, has deposited INR 100 Cr, while Bharti Airtel & Vi have deposited INR 5,500 Cr and INR 2,200 Cr, respectively.
Since a telecom operator can spend up to 9 time the deposit in the auction, the potential spend of Jio, Airtel, Vi & Adani is likely to be INR 1.26 Lakh Cr, INR 49,500 Cr, INR 19,800 Cr e INR 900 Cr, respectively. Therefore, according to some expert, with the deposit already made, the governments is likely to earn up to INR 1.95 Lakh Cr from the auction. Others estimate a much lower collection.
The 5G Outlook
With Vi’s continuing financial difficulties, the telecommunications company is not expected to spend much during the auction. Vi already has a debt of INR 1.98 Lakh Cr, of which payments of INR 8,160 Cr are due in FY 2022-23.
The government also removed the mandatory upfront payments requirement & allowed payment in annual installment over 20 years. This will ensure that companies fund do not get stuck as soon as they acquire 5G spectrums.
As seen in the Jio repository for auctions, the 4G pioneer is seriously eyeing a substantial chunk of the 700 MHz bandwidths, leaving very little for other.
Expert have said that with a deposit of INR 100 Cr, Adani Group seem to be eyeing the higher band to build private network. The Group has said that it does not want to be in the consumer mobility space and will use 5G spectrum to provide private network solution in airport, ports and power generation, among other.