5G Spectrum is Still Costly in India, Will Telcos Spend Huge Money

Jio wouldn't be too worried about its competitors taking the lead on 5G. The telco knows that apart from Airtel, it doesn't even have a big competitor in the scene right now. Jio has the money, but it can also wait. Like I said above, there are some big unknowns for the telcos when things are concerned with 5G. 

Highlights

  • Apart from the IPL (Indian Premier League), one more area where the Ambanis are expected to bid heavily is the spectrum auction for offering 5G mobile services.
  • One thing that the telcos would have in mind is that the Indian telecom sector is still not a very mature policy ground for facilitating the growth of infrastructure to proliferate 5G.
  • Since the government has announced one spectrum auction every year, this means that it won't be long before the telcos again get to bid for 5G airwaves again.

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Apart from the IPL (Indian Premier League), one more area where the Ambanis are expected to bid heavily is the spectrum auction for offering 5G mobile services. The good thing for Jio, owned by Reliance Industries Limited (RIL), is that they have the money to pull off big purchases. While they have submitted a huge EMD (Earnest Money Deposit) compared to their competitor, the question is, will they follow up with the big purchases entirely?

One thing that the telcos would have in mind is that the Indian telecom sector is still not a very mature policy ground for facilitating the growth of infrastructure to proliferate 5G. There are many confusions as well where enterprise 5G is concerned. The competitors of Jio aren't making very big moves. Especially the heavily hyped Adani Group, which only submitted an EMD of Rs 100 crore. This just makes you wonder if Jio might hold off big purchases too.

Why Telcos, Including Jio, Might Not go All Guns Blazing this Spectrum Auction

Jio wouldn't be too worried about its competitors taking the lead on 5G. The telco knows that apart from Airtel, it doesn't even have a big competitor in the scene right now. Jio has the money, but it can also wait. Like I said above, there are some big unknowns for the telcos when things are concerned with 5G.

Apart from that, the spectrum is pretty expensive. Just to give you a figure that Counterpoint Research shared - In India, per MHz of 5G spectrum is costing around Rs 317 crore to the telcos. This is the price after reducing the cost. One thing that has been pretty evident is that government cuts the price of the spectrum when it sees that the telcos aren't too eager to pay more. Thus, if all the telcos hold off their big purchases in the 5G spectrum auction right now, it could mean that the same amount of spectrum might be available in the next spectrum auction for a lower price.

Since the government has announced one spectrum auction every year, this means that it won't be long before the telcos again get to bid for 5G airwaves again. Comparatively, the spectrum cost per MHz in other countries, as shared by Counterpoint Research, is - Rs 24 crore in South Africa and Rs 71 crore in both France and the UK. In Germany, it is Rs 132 crore. It is still considerably lower than what telcos have to pay for spectrum in India.

It will be interesting to see whether Jio actually spends almost everything it wants to for 5G airwaves in this spectrum auction or if it will wait further.

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Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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