5G auctions: Reliance Jio gains an edge, Adani looks to make focused bids


Corporate Action
by 5paisa Research Team Last Updated: 2022-07-19T17:51:03+05:30

It looks like billionaire Mukesh Ambani’s Reliance Jio has a distinct edge over its competitors when it comes to the upcoming 5G auctions.

Jio has coughed up a cool Rs 14,000 crore as earnest money before the auction begins later this month. Bharti Airtel is far behind with Rs 5,500 crore and Vodafone Idea even more so, with just Rs 2,200 crore.

Surprisingly though, the Adani Group, which is a new entrant to this space, has put in just Rs 100 crore as earnest money.

So, how much spectrum is Jio likely to bid for? What about its competitors?

Industry analysts predict that Jio could look to buy 5G spectrum worth as much as Rs 50,000 crore. This will be in the 3.5GHz and 35 GHz bands.

Airtel, on the other hand, is set to spend about Rs 36,000 crore to acquire 50-80 MHz of airwaves in the 3.5 GHz band.

Vodafone Idea is likely to limit its spectrum buy in the 3.5 GHz to select circles including Delhi, Mumbai, Gujarat and Kerala.

Adani will likely buy spectrum worth just Rs 600-700 crore in the 3.5 GHz band. This will mean it will not enter the consumer mobility business and will put its spectrum to captive use.

Why should the others be relieved at Adani bidding for such low amounts of spectrum?

The development is a major relief for the three private-sector telecom operators that had just emerged from a brutal price war and regulatory upheavals to a period of relative calm.

Speculation about Adani entering the consumer wireless business had alarmed shareholders of rival telcos, bringing back memories of the assault Ambani launched six years ago that forced a crowded telecom market to consolidate and crippled the balance sheets of the ones that survived.

Experts say Adani Group’s strategy is likely to be focused on offering captive and enterprise services that do not require a lot of mid-band spectrum or capital investment.

On the other hand, Jio’s deposit indicates a massive spectrum purchase plan. Experts, however, said the carrier does not need to buy airwaves in 4G or other bands, having spent over Rs 57,000 crore in the previous auctions for 4G frequencies, the Mint newspaper noted.

Jio’s aggressive stance indicated spectrum buys across all bands, including the pricier 700MHz band, which may be used for building capacity for the 5G network.


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