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Business News/ Industry / Telecom/  Telcos may bid for spectrum worth 1.6 tn
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Telcos may bid for spectrum worth ₹1.6 tn

Reliance Jio is expected to lead the race with bids of up to $11 billion in this round, if it decides to buy 700 Mhz band

The centre has put over 72GHz of airwaves worth ₹4.3 trillion on the block. MintPremium
The centre has put over 72GHz of airwaves worth 4.3 trillion on the block. Mint

NEW DELHI : Telecom companies are likely to pick up spectrum worth 1.6 trillion, or at least 33% of the airwaves put on sale at the 5G auctions, if they were to bid for the pricier 700 Mhz band, said analysts tracking the sector.

The overall demand for airwaves will be higher compared to previous auctions, they said. “Telcos may look at 700MHz more closely. It is the primary sub-GHz band for 5G globally. Incumbents may also bid more aggressively for spectrum in 3.3GHz and 26GHz to crowd out the Adani Group. This suggests overall demand to range $13-20 billion, which is higher than the demand seen in previous auctions," said analysts at Jeffries Equity Research in a note dated 20 July.

Analysts said Reliance Jio is expected to lead the race with bids of up to $11 billion in this round, if it decides to buy 700 Mhz band, which can be used to set up standalone 5G networks (SA-5G). “If Jio aspires to rollout SA-5G it may also bid for additional 5MHz spectrum in 700MHz band, which will cost 196 billion. All this combined could lead to spending of $6-11 billion which is 3-6x its EMD," they added. EMD, or earnest money deposit, is paid to the government to show the intent of a company about the amount of spectrum it wishes to buy.

Bharti Airtel is expected to bid for 100MHz of spectrum in 3.3GHz band and 800MHz of 26GHz, enabling it to lower its spectrum usage charge immediately, the analysts said. The No. 2 carrier is also expected to purchase airwaves in the 900 Mhz or 1800MHz bands to cover for renewals or completion of blocks of 5-15 Mhz units in some markets, besides raising its spectrum share in the 2300 Mhz band in six circles. “This should lead to spectrum purchase of $5-6billion, implying 7-9x of the EMD submitted. In past auctions, Bharti has spent 5-7x of EMD submitted," Jeffries said in the note.

Vodafone may buy at least 50 MHz spectrum in 3.3GHz in metro and A-circles, and 400MHz spectrum in 26GHz band, leading to spending in the range of $1.7-2.3 billion, they added.

Reliance Jio, Bharti Airtel, Vodafone Idea and Adani Data Networks are the final bidders for the 5G spectrum auctions beginning 26 July, according to the department of telecommunications.

The centre has put over 72GHz of airwaves worth 4.3 trillion on the block, including 5G bands for the auctions. The government will hold a mock auction on 22-23 July, before starting the actual auction, the DoT said.

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ABOUT THE AUTHOR
Gulveen Aulakh
Gulveen covers both corporate and economy, and policy sections of Mint. She also covers telecom, IT from the corporate side and disinvestment, finance ministry from the economy side. Gulveen finds the rare mix of sectors she covers to be incredibly interesting.
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Published: 22 Jul 2022, 01:49 AM IST
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