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Reliance Jio had placed  ₹4,700-crore bids for mobile tower and fibre assets of Reliance Infratel (Photo: Reuters)
Reliance Jio had placed 4,700-crore bids for mobile tower and fibre assets of Reliance Infratel (Photo: Reuters)

Reliance Jio urges Centre for early spectrum auction

  • Mukesh Ambani-led telco urged the DoT to conduct spectrum auctions at the earliest to improve quality of 4G services
  • While Jio wants the spectrum auction to be held as soon as possible, rival Airtel and Vodafone Idea are of the view that the reserve price is too high

Reliance Jio Infocomm Ltd has sought an early spectrum auction, even as it alluded that rival Bharti Airtel Ltd and Vodafone Idea Ltd (Vi) were sitting on large amount of airwaves amassed through mergers and acquisitions, despite losing customers every month.

In a letter dated 28 September, the Mukesh Ambani-led telco urged the department of telecommunications (DoT) to conduct spectrum auctions at the earliest to improve quality of 4G services amid high demand for data. It also said delay in spectrum auction hurts investor confidence and leads to huge loss in government revenues.

Mint has seen a copy of the letter written to the DoT secretary Anshu Prakash. Copies of the letter have been sent to communications minister Ravi Shankar Prasad and principal secretary to prime minister PK Mishra.

“Some of the operators are merely interested in perpetuating their 2G technologies and monetise the old equipment as much as possible. We submit that the nation building polices should not be kept hostage to vested interests of such a few," Jio said.

Vi lost 4.8 million users in June, shedding customers for the eighth straight month, while Airtel lost 1.1 million subscribers. Both telcos had lost 4.7 million users each in May.

While Jio wants the spectrum auction to be held as soon as possible, rival Airtel and Vodafone Idea are of the view that the reserve price is too high. The DoT plans to put 8,300 megahertz (MHz) of spectrum at a reserve price of 5.23 trillion under the hammer.

Jio wants spectrum auction in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2500 MHz bands. It did not seek auction in the 3,300-3,600 MHz band, meant for 5G services.

Jio, the only profit-making telco whose parent Jio Platforms Ltd has raised 1.5 trillion, stares at a major chunk of spectrum license in the crucial 800 MHz expiring in 2021. Spectrum in the 800 MHz band is touted as the most efficient and is used for 4G services.

Jio has been using bankrupt Reliance Communication Ltd’s spectrum in the 800 MHz band under a sharing agreement to expand its 4G coverage across 21 circles in the country. Of the 21, the license for 18 circles will expire during July-August 2021.

In its letter, Jio said, “The auction process for this spectrum should have been started 18 months before the expiry". The telco requested the government to auction the spectrum due for expiry next year immediately so that the existing airwaves can be bought back.

Airtel and Voda Idea also have their airwaves expiring around the same time in 2021 and will need to repurchase the spectrum, but mostly in the less-expensive 1800 MHz band.

Spectrum auctions were last carried out in 2016, when the government did not receive a single bid for the 700 MHz band, ideal for 4G services, due to high reserve price.

"We reiterate that the inexplicable delay of four years in auction of spectrum since 2016 has created a situation of dire spectrum scarcity which is impacting the quality of experience and growth of services," Jio said.

In FY17, the Centre had raised 65,789 crore through spectrum sale, a fraction of the 5.63 trillion worth of spectrum, at base price, it had put up for sale. The total spectrum put up for sale was 2,354.44 MHz across seven bands, but the government managed to sell just 965 MHz.

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