5G Spectrum Auction - Bidding Begins on Day 7

The government is planning to auction spectrum for 5G networks in India. 5G spectrum will provide ultra-high-speed internet. So far, 6 days of public bidding have resulted in bids worth Rs 1,50,130 crore. Seven new rounds of bidding have added another Rs 163 crore. The bidding for the thirty-eighth round of 5G spectrum auction is underway on Monday. Bidding is taking place in the UP East circle, which includes cities like Lucknow, Allahabad, Varanasi, Gorakhpur, and other areas. The 1800-MHz band is currently used by telcos for 4G services.

Reliance Jio Infocomm

Four bidders are in the race for the coveted 5G spectrum in the Indian telecom market. Each of the four players is bidding for a slice of the spectrum – nine bands, ranging from 600 to 1800 MHz. The spectrum will cost a combined Rs. 5 lakh crore. All four players have submitted an earnest money deposit of more than Rs. 21 billion, while Adani has pitched in Rs. 100 crore.

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Bharti Airtel

The 5G spectrum auction is set to kick-off on day seven, and Bharti Airtel will be one of the bidders on Monday. While the government is looking to raise approximately 110 billion rupees from the auction, carriers are calling for a decision on the annual spectrum fee before the auction even takes place. The government has reportedly already received bids for 71 per cent of the available spectrum.

Vodafone Idea

With a combined bid amount of Rs 21800 crore, four major bidders are expected to dominate the 5G spectrum auction. Jio has deposited the highest EMD, followed by Airtel, Bharti and Vodafone Idea. The Adani Group and Vodafone Idea are also expected to bid modestly. The highest EMD reflects the amount of airwaves available for auction. Analysts predict that the highest EMD will go to Jio, followed by Airtel, Vodafone Idea and Bharti.

Adani Data Networks Limited

Reliance Jio Infocomm and Adani Data Networks Limited will start bidding for 5G spectrum auction on day 7. While the Adani Group has already submitted an EMD of Rs 14,000 crore, it is expected to bid only a fraction of that amount. The EMD indicates a player’s appetite for spectrum, strategy and eligibility points. Reliance Jio will likely bid the highest amount of the four, but Adani Data Networks Limited will likely be the second largest bidder in the auction.

Other participants

Among the other bidders, Reliance Jio has the highest EMD and has submitted the highest bid of Rs 14,000 crore for the auction. The EMD of Adani Data Networks is less than one per cent, which points to the limited demand for spectrum. The government has lowered the payment terms so that the auction winners can pay in 20 equal annual instalments. Moreover, telcos can avail a moratorium of up to 20 years to pay off the entire spectrum.

Estimated proceeds

The fifth round of the 5G spectrum auction began Thursday with four rounds of bidding, and the total amount of bids received for the high-end bands and mid-end bands reached a record-high amount of Rs 78,550 crore. The auction is expected to continue, with excess demand settling down. In the 1800 MHz band, which is a key part of the 5G communication spectrum, the reserve price has jumped to the highest among previous auctions for the same band.