India raises $10.6bn in 4G spectrum auction, Jio largest buyer

spectrum auction India Jio 5G broadband
Image by lakshmi Prasad | Bigstockphoto

India raised Rs 77,814.80 crore ($10.66 billion) from Reliance Jio, Bharti Airtel and Vodafone Idea in the latest 4G spectrum auction, which ended on Tuesday after only two days of bidding.

All three telecom players collectively placed bids for 855.60 MHz of spectrum out of a total quantity of 2308.80 MHz spectrum, which was put to auction. However, they didn’t place bids for super-premium and 5G-suitable 700 MHz due to high reserve prices. The 2500 MHz band was also left untouched.

India’s top telco, Reliance Jio, emerged as the largest buyer of spectrum with its purchase of spectrum in all 22 circles across India in the 800 MHz, 1800 MHz and 2300 MHz bands for Rs 5,77,123 crore ($7.83 billion). Jio has now increased its spectrum capacity by 55% to  1,717 MHz and is the largest spectrum holder in the sub-GHz and 2300 MHz band.

Jio said that it had achieved “complete spectrum derisking”, with an average life of owned spectrum of 15.5 years. It added that spectrum was acquired in the most cost-efficient manner with an effective cost of Rs 60.8 crore ($8.33 million) per MHz.

Jio added acquired spectrum could be utilised for transition to 5G services at the appropriate time, where Jio has developed its own 5G stack.

“We want to ensure that we keep on enhancing experiences, not only for our existing customers but also for the next 300 million users that will move to digital services. With our increased spectrum footprint, we are ready to further expand the digital footprint in India as well as get ourselves ready for the imminent 5G rollout,” Mukesh D Ambani, Chairman, Reliance Industries, said in a statement.

India’s second-largest telco, Bharti Airtel, acquired 355.45 MHz spectrum across sub GHz, mid-band and 2300 MHz bands for Rs 18,699 crores ($2.56 billion). The Sunil Mittal-led telco has now secured a pan-India footprint of sub GHz spectrum that will improve its deep indoor and in-building coverage in every urban town.

“Airtel now has a solid spectrum portfolio that will enable it to continue delivering the best mobile broadband experience in India. We are most excited at bringing the power of Airtel services to an additional 90 million customers in India through the power of our Pan India Sub GHz footprint,” Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel said in a press statement.

India’s third-largest telco, Vodafone Idea Limited (VIL), acquired 11.8 MHz spectrum worth Rs 1,993 crore ($273.01 million) to enhance 4G coverage and capacity in the 5 circles.

“Vodafone Idea entered the auction holding the largest quantum of spectrum with a very small fraction, which was administratively allocated and used for GSM services, coming up for renewal…we used the recently concluded spectrum auction to optimise spectrum holding to create further efficiencies in a few circles,” the telco said in a press statement.

India’s Department of Telecommunications (DoT) said that bidding took place for spectrum in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz bands.

“In the 2016 spectrum auction, where there were 7 bidders, the spectrum sold was 41% by quantity and 12% by value of the total spectrum put to auction. The corresponding figures in the 2021 spectrum auction are 37% and 19%, respectively, with three participants,” the DoT said in an official notification after the auction concluded on Tuesday evening.

The DoT secretary Anshu Prakash informed the media that Spectrum Usage Charges (SUC) for the spectrum acquired in this auction would be payable at the rate of 3% of Adjusted Gross Revenue (AGR) of the licensee, excluding revenue from wireline services.

“The auction is concluded, and these provisional results are subject to scrutiny and approval by the Government…with the deployment of additional spectrum acquired in this auction in the networks of Telecom Service Providers, the Quality of Service and customer experience of telecom consumers across the country are expected to improve,” the DoT said.

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