- The first day of the 5G spectrum auction generated a revenue of around Rs 1.45 lakh crore.
- Reliance Jio has spent upwards of Rs 80,000 crore and is likely to have bought pricey airwaves in the 700MHz band, across India.
- Jio is likely to have better calling and overall network quality courtesy the band.
The much-awaited 5G auction in India kickstarted on July 26th as promised and the noted bidders quite obviously included Jio, Airtel, Vi and Adani groups. The fifth round of auction has kickstarted and the first two days have seen bids cross the tune of around Rs 1.49 trillion. The complete process of the 5G auction will be completed by August 14th and 5G services will roll out by September-October. Reliance Jio, the current market leader, has spent upwards of Rs 80,000 crore and is likely to have bought pricey airwaves in the 700MHz band, across India. This is in addition to mid-band (3.3-3.67 GHz) and high-band (26 GHz) airwaves.
As multiple rounds of the 5G spectrum have been completed, Jio is likely to have an advantage with regards to calling quality and overall network quality. Here’s why.
Jio 5G network
During day one of the 5G auction, Bharti Airtel and Vodafone Idea (Vi) spent 45,000 crore and Rs 18,400 crore respectively. However, on the flip side, Jio spent over Rs 80,000 crore and grabbed the expensive 700MHz band. ICICI Securities said, “Our analysis shows that Jio has likely bid for the highest spectrum worth Rs 80,100 crore and likely opted for 10 MHz in the 700 MHz band. It appears Adani has bought 26 GHz in 20 circles (except in Delhi and Kolkata), and its total spectrum purchase could be for Rs 900 crore.”
Why 700MHz is considered as ‘Premium’
In India, the 5G spectrum that is being auctioned includes 600MHz, 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300MHz, and 26GHz bands. A total of 72097.85MHz spectrum has been put to auction and as per government sources, the bidding was mostly focused on 3300 MHz, 26 GHz and 700 MHz.
Among these, the 700MHz is considered a “premium” band and it sells at a higher price. The reason behind this is that the 700MHz bands will help telecoms cut costs and offer better network coverage. Due to the low frequency and the ability to penetrate buildings efficiently, the 700MHz band makes sense for telecom operators to offer connectivity in congested regions. However, the 700MHz band still has a high reserve price. In the 2016 auctions, the 700MHz band had failed to attract the interest of telecom in India.
Sources in the government claim that around 40 percent of the premium 700MHz spectrum has been sold. As a part report by news agency PTI, provisional bids worth Rs 39,270 crore were received on day one of the auctions for the 700MHz spectrum.
The frequencies in the range of 698 and 806MHz are more efficient when compared to the standard 1800MHz. Considering India’s population density and congestion, the 700MHz will improve the quality of 5G services. More so in the urban areas where 5G connectivity will roll out first. This also costs less for telcos to provide broadband services in the 700MHz band when compared to 2100MHz.
