On the sixth day of the spectrum auction, bids for 5G airwaves surpassed Rs 1.5 lakh crore, with the government earning an additional Rs 163 crore on Sunday.
The focus was on the vital Uttar Pradesh (East) market, where competition for airwaves in the 1800 MHz band heated up again after a day’s respite. At the conclusion of day 6, the government’s total receipts had risen to Rs 1,50,130 crore, with bidding slated to resume on Monday with round 38. The per unit price of the 1800 MHz spectrum in Uttar Pradesh (East) circle has risen to Rs 160.57 crore, or 76.5 percent higher than the base price of Rs 91 crore per MHz.
In fact, the current auction price for 1800 MHz in the circle is far more than the Rs 153-crore per MHz base price for the March 2021 auction.
Reliance Jio Infocomm and Bharti Airtel NSE -1.10 percent spent Rs 551 crore and Rs 490 crore, respectively, in the 2021 auction to purchase 3.6 MHz and 3.2 MHz in the important circle’s 1800 MHz band, but that was at the reserve price of Rs 153 crore. This time, the purchasers will be paying a high price for the band’s airwaves, which have been up for grabs for the last five days.
The conclusion is critical for Airtel NSE -1.10 percent, which is competing with Jio for territory in India’s most populated circle, where some of its premium 900 MHz airwaves will expire in February 2024. This is especially true given that Jio is said to have purchased ten units of super-efficient 700 MHz spectrum across India, including in Uttar Pradesh (East). “”Clearly, the UP (East) war appears to have devolved into an ego battle between the top two carriers, with neither prepared to concede just yet, given the market’s strategic importance,”” a top telco executive told ET.
The sixth day of the 5G auctions saw seven more rounds of bidding.
According to auction watchers, total outflows for the 1800 MHz band in India have grown to Rs 10,333 crore (up from Rs 10,170 crore on day 5) — about five times the band base price of Rs 2,116 crore.
Analysts estimate Jio’s total spectrum purchases to be more than Rs 84,500 crore, while Airtel’s are more than Rs 46,500 crore. Vodafone Idea’s expenditures exceed Rs 18,500 crore.
According to analysts, the UP (East) circle accounts for 6.6 percent of AGR and is the fourth-largest service region in terms of adjusted gross revenue (AGR). Individual operators’ service areas also contribute to a sizable portion of their total revenues, ranging from 6.5 percent for Vi and 8.4 percent for Airtel to 7.6 percent for Jio. This year, the government auctioned a little more than 72 GHz of 5G airwaves for 20 years across 10 bands, valued at Rs 4.3 lakh crore at reserve rates. Over 40% of this has already been bid on. Overall outflows in other bands have been stable in recent days. Telcos have invested Rs 80,590 crore on C-band (3.5 GHz) waves, Rs 14,709 crore on the high band (26 GHz), Rs 3,180 crore on 2100 MHz band, and Rs 39,270 crore on 700 MHz waves so far.
Billionaire Mukesh Ambani’s Reliance Jio, Sunil Mittal’s Bharti Airtel, Vodafone Idea, and a unit of billionaire Gautam Adani’s flagship Adani Enterprises are competing for the 5G spectrum, which offers 10 times faster speeds than 4G, lag-free connectivity, and the ability for billions of connected devices to share data in real-time.
The Fifth Generation, or 5G, would enable solutions such as e-health, connected vehicles, more-immersive augmented reality, and metaverse experiences, life-saving use cases, and advanced mobile cloud gaming, among others, in addition to powering ultra-low latency connections that allow downloading full-length high-quality video or movie to a mobile device in a matter of seconds (even in crowded areas).