Bids worth 1.45 lakh crore after 4 rounds of bidding on Day 1 of 5G Auctions

On the much-awaited 5G auctions that commenced on Tuesday, July 26, 2022, 4 rounds of bidding were completed and the Department of Telecom (DoT) received INR 1.45 lakh crore worth of bids for spectrum by Telecom Operators Bharti Airtel, Reliance Jio, Vodafone Idea and Adani Data Networks.

Speed capacities of 5G services are expected to be 10 times faster than the current 4G speeds.

The auction is held for spectrum in various low (600 megahertz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz), and high (26 GHz) frequency bands. With adequate spectrum availability, the entire spectrum so far has been bid at reserve prices.

Union Minister for Communications, Ashwini Vaishnav said, “Approximately Rs 1.45 lakh crore is an important number. This shows that the entire industry is now moving towards a positive territory in terms of new investments, quality of services, new technology.”

“We have to complete this process by August 14 and 5G services in the country will start by September-October,” the minister continued, in a press conference after the first day of bidding.

According to End of day 1 report by Nomura Global Markets research,  ‘at current overall bid value, DoT could garner ~INR130bn in upfront payments for FY23F, and ~INR130bn annually over the next 19 years. The bidding for 3300 Mhz (prime band for 5G), has been in line with our expectations, with ~72% of the spectrum on offer receiving bids. With the scrapping of Spectrum Usage Charges (SUC) from the current auctions, the 26GHz band has also seen good demand, with ~72% of the spectrum on offer receiving bids.’ 

The Nomura report further goes on to say, ‘Based on the earnest money deposits (EMD), the only bidder for the pan-India 700 MHz band could be R-Jio, in our view. 700 MHz band could give an edge in terms of network quality, especially indoors.’

In all probability, the auction process is likely to be completed today and high-speed telecom services are expected to be offered in several cities across the country by year end.

Earlier, according to information released by the DoT on July 18, as part of the list of pre-qualified bidders, Reliance Jio had submitted an Earnest Money Deposit (EMD) of ₹14,000 crore. This is the highest amount among the 4 participating telcos. With Bharti Airtel submitting and EMD of 5500 crore, and Vodafone Idea submitting an EMD of 2200 crore. Gautam Adani led, Adani Data Networks has submitted a modest EMD of only 100 crore as its initial foray into the telecom sector.

Amid speculation, the new entrant Adani Data Networks confirmed their participation in the 5G auction, but seems to have restricted their bidding to select circles where the parent entity has presence through airports, ports, logistics, power generation, transmission, distribution and various manufacturing operations.