5G Spectrum Auction 2022 Day 1 Saw Jio Pushing for 700 MHz Spectrum

Cash-strapped Vodafone Idea (Vi) is estimated to have spent Rs 184 billion. The telco may have purchased 50 MHz of spectrum in the 3300 MHz band in 17 circles for Rs 152 billion. Further, Vi has likely spent Rs 26 billion in getting 400 MHz of spectrum in the 26 GHz band.

Highlights

  • The second day of bidding for the 5G spectrum in India should have already started at the time of writing this.
  • Bharti Airtel may have opted for spectrum worth Rs 450 billion during the first day of the 5G spectrum auction, while Vodafone Idea is estimated to spend Rs 184 billion for spectrum, said ICICI Securities.
  • The Adani Data Networks is expected to have bid for 5G airwaves in the mmWave length frequency on a PAN-India basis.

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The second day of bidding for the 5G spectrum in India should have already started at the time you read this. Let's recap what happened on the first day. As per ICICI Securities, Jio pushed for the 700 MHz spectrum. For the unaware, the 700 MHz spectrum can be very useful for providing enhanced network coverage to consumers. Reliance Jio put in the highest bid, worth Rs 801 billion, said the analyst. Jio likely opted for 10 MHz of spectrum in the 700 MHz band. Up until now, the telcos have stayed away from the 700 MHz band spectrum because it has been pretty expensive.

Bharti Airtel may have opted for spectrum worth Rs 450 billion during the first day of the 5G spectrum auction, while Vodafone Idea is estimated to spend Rs 184 billion for spectrum, said ICICI Securities. On the first day, the bids were received for spectrum across several bands, including 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2500 MHz, 3300 MHz, and 26 GHz bands. This will not only help the telcos with launching 5G but will also enable them to cover gaps in 4G.

700 MHz Spectrum Being Sold a Surprise Because of High Price

The Adani Data Networks is expected to have bid for 5G airwaves in the mmWave length frequency on a PAN-India basis. What's interesting is the uptake of 700 MHz band frequencies. Many analysts have predicted for it to go unsold. ICICI Securities said that the first-day spending by the telcos is pretty unexpected because the RoIC (Return on Invested Capital) reduces if the spectrum purchased is high in cost. The spending by the operators is higher than what the analysts had expected.

Jio Spent 2x than the Base Estimate of ICICI Securities

In a note, ICICI Securities said that Jio may have spent Rs 810 billion which is 2x than its base estimate. The most expensive buy for Jio would be the 700 MHz spectrum (10 MHz PAN-India) for Rs 393 billion. The analyst said that Jio might have also bought 2200 MHz in the 3300 MHz band (100 MHz per circle) for Rs 317 billion. The telco might have also bought 17600 MHz quantity in the 26 GHz band (800 MHz per circle) for Rs 56 billion. In addition to this, Jio might have also bought 20 MHz in the 800 MHz band (4 circles) for Rs 10.6 billion and 20 MHz in the 1800 MHz band (4 circles) for Rs 25 billion.

Bharti Airtel Spending Estimate on Day 1 of 5G Spectrum Auction 2022

ICICI Securities said that its analysis shows that Airtel bought 13 MHz of airwaves in the 900 MHz band in 'C' circles for Rs 3.6 billion. Apart from this, the telco may have gone for 44 MHz quantity in the 1800 MHz band in nine circles, worth Rs 47 billion. Then, Airtel would have picked 30 MHz of spectrum in the 2100 MHz band in six circles for Rs 27 billion.

In the 3300 MHz band, Airtel is estimated to have bought 2200 MHz (100 MHz each circle) for Rs 317 billion and 17600 MHz quantity in the 26 GHz band (800 MHz per circle) for Rs 56 billion. Airtel's total spending has been estimated at Rs 380 billion, which is 20% higher than what Airtel was expected to spend.

Vodafone Idea Should Have Spent Rs 184 Billion

Cash-strapped Vodafone Idea (Vi) is estimated to have spent Rs 184 billion. The telco may have purchased 50 MHz of spectrum in the 3300 MHz band in 17 circles for Rs 152 billion. Further, Vi has likely spent Rs 26 billion in getting 400 MHz of spectrum in the 26 GHz band. The telco appears to have added 10 MHz of spectrum in the 2500 MHz band in Punjab and Andhra Pradesh for Rs 6.5 billion.

Adani Spent Rs 9 Billion as per Estimates

ICICI Securities said that Adani Data Networks likely spent Rs 9 billion for getting 3350 MHz quantity in the 26 GHz spectrum band in 20 circles (except Delhi and Kolkata). But this is not the complete data for the purchase that Adani Group made, said the analyst.

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