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Jio can be the lead bidder


Jio can be the lead bidder

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5G spectrum auction enters second day: Jio could be top bidder

New Delhi:

With an expected bid of Rs 1.45 lakh crore on day one, the 5G spectrum auction entered day two on Wednesday with the start of the fifth round.

Tycoons Mukesh Ambani, Sunil Bharti Mittal and Gautam Adani and Vodafone Idea are participating in an online auction to buy fifth generation (5G) radio waves.

The government received fixed spectrum bids worth Rs 1.45 lakh crore on Tuesday after completing four rounds of spectrum bids on the first day.

Analysts said Ambani’s Reliance Jio could be the most aggressive in the race.

Although details of the bids have yet to be announced, ICICI Securities said its analysis shows that Jio has bid for the highest spectrum of Rs 80,100 crore and is likely to choose the 10 MHz spectrum in the 700 MHz premium band.

Bharti Airtel bid for spectrum worth Rs 45,000 crore, likely in the 1800 MHz and 2100 MHz bands, spending 20% ​​more than expected.

He said Vodafone Idea Ltd would have offered Rs 18,400 crore for spectrum, while Adani Data Networks would have had to pick up 26 GHz spectrum across India.

“It appears that Adani has purchased 26 GHz spectrum in 20 circles (excluding Delhi and Kolkata), and his total spectrum purchase could be 3350 MHz for Rs 900 crore.

ICICI Securities said, “We believe the preliminary data does not fully reflect Adani’s purchase. We are of the opinion that he should have purchased 200 MHz of spectrum in all circles except Gujarat where he purchased 400 MHz.

Nomura said that at the current total bid price, the government can get an advance payment of Rs 13,000 crore in the current financial year and get it every year for the next 19 years.

Early offerings were large in the 1800 MHz and 2100 MHz spectrum bands, as well as the 3.3 GHz, 26 GHz and 700 MHz 5G spectrum bands. A few selected offers were also placed in the 900 MHz and 2,500 MHz frequency bands.

“Bidding activity in the band has been primarily at reserve price,” Credit Suisse said.
According to the results of the bidding activity at the end of the day, bids have been placed for 10 MHz spectrum (2 blocks) on a pan-India basis in the 700 MHz band.

It could have happened through Jio, Credit Suisse said. “Jio’s record of Rs 14,000 crore gives him enough eligibility points to bid for the 700 MHz spectrum.” The 5G spectrum offers ultra-fast connectivity (approximately 10 times faster than 4G), without lag, and allows billions of connected devices to share data in real time.

In addition to powering an ultra-low latency connection, which can download a full high-quality video or movie to a mobile device in seconds (even in crowded areas), 5G e-Health will enable connected solutions like vehicles. , more immersive augmented reality and metaverse experiences, life-saving use cases, and innovative mobile cloud gaming, among others.

The government is expected to allocate spectrum in record time and 5G services are expected to start by September.

Credit Suisse said the 5G handset ecosystem is still nascent, accounting for around 5-7% of the total smartphone penetration of around 600 million. “Besides low penetration, there is also a need to reduce the prices of 5G handsets – the minimum price for a 5G smartphone is Rs 11,000 compared to Rs 6,500-7,000 for a good 4G smartphone.”

On the issue of consumer pricing, ICICI Securities said the spectrum consumed by market leaders Jio and Airtel was much higher than expected, prompting the industry to quickly justify such a large investment.

“This is not true in most parts of the world, and broad-spectrum investments have been observed to reduce the return on invested capital (ROIC) for the industry. Therefore, we invest more in Bharat Telecom. But be careful,” he added.

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