5G auction: The key takeaway
For Indian consumers, the big takeaway is that faster mobile internet, with greater possibilities, and, hopefully, fewer network disruptions, is now a step closer
The 5G spectrum auctions concluded on Monday, after a week and 40 rounds, raising around ₹1.5 lakh crore for the government. There were only four bidders for the spectrum — Reliance Jio, Airtel, Vodafone Idea, and Adani. The government recently announced a ₹1.64 lakh crore revival package for the State-owned BSNL, which includes 4G spectrum, and it is likely that, at some point in the future, another package that includes 5G will be made available to the company. That means India will have five 5G players.
Five clear inferences can be drawn from the auction. One, the reserve prices set for the auction may have been too high. While 71% by volume of the spectrum on offer was snapped up, the government realised only 35% of the reserve price ( ₹4.3 lakh crore), indicating a clear preference for lower-value 5G spectrum among most telcos. Still, the amount raised is more than the government expected from this auction. Two, Reliance Jio, the only telco to buy spectrum in the expensive (but also critical for high-end 5G services) 700 MHz spectrum — paid the most, ₹88,078 crore in the auctions — will likely be the only telco with a significant play across both the retail and enterprise sections of the market, apart from focusing on value-added services such as telemedicine and online education, and, over time, on emerging metaverse applications. The focus on 700 MHz is also a clear sign that Jio will have more standalone 5G networks than the other telcos, which will overlay their 5G networks strategically atop their 4G ones. Three, Airtel, bid smartly (it spent a little less than half of what Reliance did) to remain competitive — it bought almost 80% of the volume of spectrum Jio did, but none in the 700 MHz band — although it is unlikely to have as much of a value-added play as Jio will. Four, Vodafone Idea, bought a fourth of the spectrum that Jio got, but spent only around 20% of what the latter did, a clear indication that the company is still interested in the space (even if only to keep itself attractive for an eventual buyer). And five, Adani was the surprise bidder, although it bought just 400 MHz of spectrum, spending ₹212 crore. This could be for internal enterprise use, as the company has said (the band in which it has bought spectrum can’t be used for public networks), although the group’s entry into the telecom space has set tongues wagging about a possible acquisition play in the future.
For Indian consumers, the big takeaway is that faster mobile internet, with greater possibilities, and, hopefully, fewer network disruptions, is now a step closer.