New Delhi, June 25: Today marks a significant milestone in India’s digital evolution as the much-anticipated 5G spectrum auction commenced. This auction, the 10th since the inception of online bidding for radiowaves in 2010, is pivotal for accelerating the rollout of 5G services, enhancing connectivity, and bridging the digital divide across India. Major telecom giants, including Reliance Jio, Bharti Airtel, and Vodafone Idea, are actively participating, signaling a competitive and transformative event for the industry.
Auction Details and Major Participants
The Department of Telecommunications (DoT) has put over 10,500 megahertz of mobile service radiowaves, valued at more than ₹96,238 crore, up for auction. The process began at 10 am, with keen interest shown in four primary spectrum bands: 900 MHz, 1,800 MHz, 2,100 MHz, and 2,500 MHz. By 3 pm, the auction had already entered its fourth round.
Reliance Jio, having deposited the highest earnest money of ₹3,000 crore, is poised to bid for the maximum amount of radio waves. Bharti Airtel and Vodafone Idea (VIL) have submitted earnest money deposits of ₹1,050 crore and ₹300 crore, respectively, setting the stage for a dynamic bidding war.
Industry Expectations
Telecom industry leaders are optimistic about the auction’s potential to significantly accelerate the deployment of 5G services. SP Kochhar, Director General of the Cellular Operators Association of India, emphasized the transformative impact of the auction: “The 5G spectrum auctions will catalyze the rapid rollout of 5G services across the country, leading to enhanced coverage and vastly improved connectivity. By bridging the digital divide, these auctions will ensure that even the most remote areas of our country gain access to high-speed internet, thereby fostering greater economic opportunities and social advancement.”
Market Analysis
Telecom expert Parag Kar provided insights into the bidding strategies of the major players. Reliance Jio is expected to bid for 37.36% of the total spectrum value based on its earnest money deposit, with Bharti Airtel targeting 13.07% and Vodafone Idea 3.73%. Kar predicts that Jio may focus primarily on the 800 MHz band, potentially leading to a cash outflow of ₹18,000 crore.
“Bharti’s targeted approach in the upcoming auction is aimed at consolidating and enhancing its spectrum efficiency. The total outflow for Bharti will be ₹11,512 crore at the reserve price,” noted Kar. He added that Vodafone Idea, currently burdened with debt, is likely to focus on strategic acquisitions in the 26 GHz band to reduce its spectrum usage charges.
Financial Implications
The auction’s base price is approximately ₹96,317 crore, covering all available spectrum bands, including the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands. The 3,300 MHz and 26 GHz bands are particularly crucial for 5G services.
Prashant Singhal, another telecom expert, commented on the global revenue trends for 5G: “I think 5G for the sector has not generated incremental revenues. That’s unfortunate, but it’s the same worldwide. The incremental revenues from 5G are not more than 1-2%, and a large piece of 5G revenues comes from the enterprise side, through private networks and IoT.”
Conclusion
As the 5G spectrum auction progresses, it is poised to lay a strong foundation for the future of digital connectivity in India. The involvement of major telecom players and the substantial financial stakes highlight the auction’s significance. The outcomes are expected to enhance 5G coverage and drive significant economic and social benefits by bridging the digital divide and fostering greater economic opportunities.
This auction symbolizes the government’s commitment to ‘Viksit Bharat’ (developed India). Its successful execution could mark a transformative step in India’s digital journey, ensuring that even the most remote areas gain access to cutting-edge technology and high-speed internet, thereby fostering a more connected and prosperous nation.