10th spectrum auction to begin on Jun 25; Jio potential top bidder

New Delhi: Spectrum worth over Rs 96,000 crore set for auction across eight bands starting Tuesday, with telecom giants Reliance Jio, Bharti Airtel, and Vodafone Idea vying for crucial 5G mobile services spectrum.

The upcoming auction marks the first since August 2022 and includes spectrum in bands vital for advancing 5G technology.

A total of eight spectrum bands, including 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz, will be auctioned with a base price of approximately Rs 96,317 crore.

"We applaud the government's decision to auction spectrum across these critical bands. However, it's crucial that spectrum in the 600 MHz and 1400 MHz bands is also auctioned soon, given their significance to the mobile industry," remarked Bharat Bhatia, President of ITU-APT Foundation of India.

Reliance Jio leads with an earnest money deposit of Rs 3,000 crore, positioning it to potentially bid for the maximum spectrum. Bharti Airtel and Vodafone Idea have deposited Rs 1,050 crore and Rs 300 crore respectively.

Telecom analyst Parag Kar estimates that based on the earnest money deposit, Reliance Jio can bid for 37.36% of the total spectrum value, while Bharti Airtel and Vodafone Idea can bid for 13.07% and 3.73% respectively.

"Jio's strategy may focus on the 800 MHz band, targeting an estimated cash flow of Rs 18,000 crore," Kar noted in his analysis.

He further added, "Bharti Airtel aims to consolidate its spectrum efficiency with an expected outflow of Rs 11,512 crore at the Reserve Price."

Strategically, debt-laden Vodafone Idea (VIL) is anticipated to pursue acquisitions, particularly in the 26 GHz band, to optimize its spectrum usage charge.

Market insights from IndusLaw Partner Shreya Suri suggest that Airtel is prioritizing additional 5G coverage sites, while Vodafone may reduce coverage in certain circles and opt against renewing some spectrum.

The spectrum auction is anticipated to witness selective bidding, particularly in bands like 3300 MHz, crucial for 5G deployment with low capital expenditure requirements.