Reliance telecom’s Jio has put the biggest bid in the 4G airwaves auction held by the Indian government. The auction surprisingly exceeded expectations and Jio acquired about three-fourth of the sold spectrum worth Rs 5,77,122.65 crore.
Reliance Jio Infocomm Ltd has acquired 488.35 MHz of airwaves across three bands – 800 MHz, 1800 MHz, and 2300 MHz. Other players of the industry wrapped under a limited amount. Bharti Airtel Ltd bought spectrum worth Rs 18,698.75 crore while Vodafone Idea Ltd (VIL) settled with spectrum worth Rs 1,993.40 crore, majorly for renewal.
“Given the covid scenario and other stress situations the sector is facing, we had anticipated spectrum sold would be Rs 45,000-50,000 crore. We are happy that the industry is confident, and it has bid to acquire more,” said Secretary of Department of Telecommunications (DoT) Anshu Prakash expressing his happiness. Industry analysts had estimated the auction to wrap at around Rs 60,000 crore.
The Indian government conducts the spectrum auction at regular intervals and the current term is about to expire in 2021. Among the three buyers, Jio was the most aggressive bidder as it had only 98.8 MHz of spectrum expiring this year. The telco will pay the purchase amount to augment its spectrum. Jio claims to increase its spectrum footprint by 55% across 22 circles in India after this purchase.
Buyers will have to pay 25% of the total amount by end of this fiscal year in March for the 800 MHz band. While for higher bands of 1800 Mhz and 2300 MHz, they will have to pay 50% of the amount in the same period. DoT will collect the remaining payment after two years in 16 installments.
The government has sold 855.6 MHz spectra out of the available 2308.8 MHz. The unsold band of 700 MHz could be used in the next spectrum auction for 5G services, said Mr. Prakash. He further explained that the 700 MHz band has higher efficiency suitable for 5G and is the most expensive in the latest auction.