5G auction: Reliance Jio outplays Adani Group, submits massive ₹14,000 crore as earnest money

Reliance Jio, owned by billionaire Mukesh Ambani, put down ₹14,000 crore as earnest money for the 5G spectrum auction whereas rival Adani Group put down a meagre ₹100 crore. The amount of earnest money a corporation must deposit determines how many airwaves it can bid for in the auction.

According to data made public by the Telecom Department on July 18 as part of the list of pre-qualified bidders, Reliance Jio has filed the highest earnest money deposit (EMD) of the four participants in the spectrum bidding process, amounting to ₹14,000 crore.

According to the DoT website, Bharti Airtel, which is helmed by Sunil Mittal, has contributed ₹5,500 crore as EMD, while Vodafone Idea has contributed ₹2,200 crore.

EMD numbers typically reveal a player's appetite, strategy, and plan for purchasing spectrum during an auction. Additionally, it establishes the qualifying points, which telcos use to aim for particular quantities of spectrum in distinct circles.

The auction, which is set to start on July 26, will feature 72 GHz (gigahertz) of spectrum valued at least at ₹4.3 lakh crore.

All four applications for 5G radio-waves have made earnest money deposits totaling ₹21,800 crore, which is a significant increase from the ₹13,475 crore put up in the 2021 auction when there were just three competitors.

The earnest money deposit indicates that Jio, the largest telecom firm by users in India, may be bidding extremely strongly in the future auctions, but Adani Group might be trying to buy the bare minimum spectrum required to establish a private network. Adani Data Networks' EMD is ₹100 crore, showing a modest and constrained need for spectrum on their part.

The billionaire Gautam Adani's organisation said earlier this month that it is competing for spectrum, which it said will be used to build a private network to service its enterprises, including data centres, airports, and power. The Adani Group has been very clear that it has no interest in entering the consumer mobility market.

Market watchers say that a telco has the ability to go after radiowaves worth up to 7-8 times the EMD amounts submitted by them, although players do tend to keep headroom for manoeuvring and flexibility, based on how auction proceeds and the strategy adopted by rivals.

An industry expert who did not wish to be named estimated that based on EMD, Jio can place bids worth ₹1.27 lakh crore, Bharti Airtel ₹48,000 crore, VIL ₹20,000 crore and Adani Data about ₹700 crore.

With its EMD at ₹14,000 crore, the eligibility points assigned to Jio for the auction stand at 1,59,830, the highest in the list of four bidders, according to details put out by DoT.

The eligibility points allocated to Airtel are 66,330, while that of Vodafone Idea are 29,370.

Adani Data Networks received eligibility points of 1,650, based on its deposit. Promoter Adani Enterprises' net worth has been taken into consideration, while computing the eligibility of Adani Data Networks, resulting in total net worth of ₹4,979 crore.

The net worth of Reliance Jio Infocomm, a subsidiary of Jio Platforms Ltd - the unit that holds the digital assets of Reliance - stood at ₹1,97,790 crore.

Vodafone Idea has a negative net worth of ₹80,918 crore, while the paid-up capital is at ₹32,119 crore.

Bharti Airtel's net worth stood at ₹75,886.8 crore.

The auction will be held for spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands.

While the 5G spectrum in nine frequency bands will be auctioned, the Notice Inviting Applications -- the bid-related document issued by the Telecom Department -- has said tech firms will be allowed to take the 5G spectrum for their captive non-public network on lease from the telecom companies.

The bid document said direct allocation of spectrum to tech companies will follow a demand study and sector regulator's recommendation on aspects such as pricing and modalities of such allocation.

In the previous auction held in early 2021, Reliance Jio Infocomm had deposited earnest money amount of ₹10,000 crore while Bharti Airtel and Vodafone Idea deposited ₹3,000 crore and ₹475 crore, respectively.

In the auction conducted last year, Reliance Jio picked up spectrum worth ₹57,122.65 crore, Bharti Airtel bid about ₹18,699 crore, and Vodafone Idea bought spectrum worth ₹1,993.40 crore.

(With PTI inputs)