The frequency sale ends after the second day of the auction. The Department of Telecommunications (DoT) managed to sell radio waves valued at Rs 77.814 billion, which is roughly 20 percent of the amount (Rs.3.9 billion) the Ministry wanted to generate from these auctions. Between three telecommunications companies (Reliance Jio, Airtel, and Vodafone Idea) participating in the auctions, 855.7 megahertz (MHz) of 2251.25 MHz radio waves that were up for sale were sold over two days.
While the type of spectrum telecom companies picked up was on the expected lines, Jio and Airtel amazed the sector with the spectrum they acquired.
Jio detected 488.35 MHz radio waves in three bands – 800 MHz, 1800 MHz and 2300 MHz. The range, valued at 57,122.65 rupees, is much higher than industry estimates. Jio has a spectrum of 98.8 MHz (in the 800 MHz band) this year, for which, according to Credit Suisse estimates, 23,863.8 billion rupees will be paid out in January. Telecommunications will now pay a lot more to strengthen its frequency stance. The telecommunications company claims that the recent acquisitions would increase its entire frequency range by 55 percent to 1717 MHz (uplink + downlink).
“Jio has revolutionized India’s digital landscape and made the country the fastest adopting Digital Life. We want to make sure we continue to improve the experience not just for our existing customers, but for the next 300 million users who are moving.” Digital services. With our expanded spectrum footprint, we are ready to continue building the digital footprint in India and prepare for the upcoming 5G rollout, “said Mukesh Ambani, chairman of Reliance Industries, in a statement.
Similarly, Airtel has acquired a spectrum of 355.45 MHz (worth 18,699 billion rupees) in five bands – 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz. This was much higher than the previous estimates. How?
Airtel was expected to largely renew the spectrum in 900 MHz and 1800 MHz, which will expire this year, and its total expense would be 13,500 rupees, according to Morgan Stanley. However, Airtel went a step ahead and also acquired frequencies at 800 MHz, 2100 MHz and 2300 MHz (in addition to 900 MHz and 1800 MHz) mainly to improve deep indoor and building (in urban areas) coverage and improve network capacity. Airtel plans to serve 90 million additional subscribers as the spectrum in the sub-GHz spectrum (800 MHz and 900 MHz) is larger.
“While the sub-GHz bands will be critical to the future deployment of 5G technology as well as improving indoor coverage, the appetite for the 2300 MHz band stems from increased mobile broadband usage and therefore the need to improve network capacity, “Ankit Jain, Vice President, ICRA, said in a note. ICRA expects the industry’s indebtedness to rise further to around Rs.5 billion by March 31, 2022 as a result of these purchases.
Vodafone, on the other hand, was modest in acquiring radio waves. It has only earned 11.9 MHz of spectrum for Rs 1,993.4 crore – much lower than industry estimates. It should be noted that none of the telecommunications companies bid on the 700 MHz and 2500 MHz bands, which together accounted for approximately 40 percent of the total airwaves for sale. The 700 MHz band also remained unsold at auctions in 2016 because of its perceived high prices. Even after the rates were cut from Rs 11,485 per MHz in 2016 to Rs 6,568, this band has not been touched by any telecommunications company recently.
Jio and Airtel’s aggressive bidding largely negates three popular perceptions. Many analysts believed that with the use of more efficient technologies such as LTE and LTE Advanced, the frequency requirements of telecommunications companies would decrease over time. Then it was also assumed that a shift towards 5G would increase reliance on lower latency networks like fiber optics, ultimately reducing the need for more spectrum. Finally, the extensive consolidation of the sector over the past three to four years was seen as a new opportunity for telecommunications companies to acquire spectrum through non-auction modes.
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