5G Spectrum Auction | Jio To Shell Out More In Bidding, Airtel Could Be In Second Spot: Analysts

Analysts pointed out based on EMD reports that the modest participation is seen from Vodafone Idea and Adani Group

The Department of Telecom (DoT) is aiming to fetch Rs 70,000 crore to Rs 1,00,000 crore from the 5G auctions.

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From Mukesh Ambani’s Reliance Jio to Gautam Adani’s Adani Data Networks, all are in fray for the ongoing auction for India’s 5G spectrum that began on Tuesday morning. Besides, Jio and Adani, Bharti Airtel and Vodafone Idea were also taking part for the bidding for the 72 GHz of radiowaves across different bands worth Rs 4.3 lakh crore offer. 

The Department of Telecom (DoT) is aiming to fetch Rs 70,000 crore to Rs 1,00,000 crore from the 5G auctions. The bidding started at 10 am and will go on till 6 pm. Some sector analysts have shared their views on the 5G auction in the following.  

According to a report by IANS, some research reports stated with sufficient telecom spectrum available for 5G network, it is unlikely that the bidding will be aggressive.

Morgan Stanley in its report said that the spectrum liability for Airtel could be higher going by its EMD paid. The maximum spectrum that Airtel could bid would be Rs 48,900 crore versus Morgan Stanley’s base-case estimate of $2.4 billion in FY23.

“The highest amount of spectrum available per player for 5G bands on a pan-Indian basis would be worth Rs 48,900 crore ($6.1 billion). Assuming both Jio and Airtel bid to the maximum extent allowed, there would still be enough spectrum left to satisfy the maximum amount that the other two players can bid (based on their Earnest Money Deposit amounts),” Morgan Stanley said. It had assumed cumulative spectrum liability related to 5G of $3 billion over FY23-24.

Another financial services firm, Nomura said, “Given adequate spectrum availability, and based on our assumptions, we estimate all the winning bids at the reserve prices with overall spectrum outlay of potentially about Rs 1 lakh crore.” However, given the nascent 5G ecosystem (a modest about 7 per cent of the overall smartphone base is 5G enabled) and evolving use, the roll out will be in metros and larger cities, Nomura added.

According to a report by Moneycontrol, R Chandrasekhar, former telecom secretary, said considering the total EMD the bidding amount could reach around “Rs 2 lakh crore against the total spectrum available”. The publication has said that Jio is likely to shell out the most in 5G auction, followed by Airtel. The modest participation is seen from Vodafone Idea and Adani Group, analysts pointed out based on EMD reports.

Chandrasekhar told Moneycontrol the 700 MHz spectrum band can be crucial for telecom companies if they want to expand in rural areas. The roll-out, however, is expected to be more intense in regions where use is high.

Quoting rating agency ICRA, Bloomberg said the sale of airwaves may raise about Rs 1.1 lakh crore ($14 billion).