Bharti Airtel and Reliance Jio are now expected to flush in more money at the upcoming spectrum auctions. The sudden change in the estimated expense for the telcos comes because of the government's latest decision. The government has now reduced the time for the telcos to give notices for using the spectrum won at the auction to roll out any new technology. For the unaware, the time has been reduced by half to six months. This means the telcos will be able to use the spectrum purchased at the auction for rolling out 5G faster than before — more details on the story ahead.
What Would More Revenue From Airtel and Jio Look Like for the Government?
As per a report from ET Telecom, the government stands to get up to Rs 8,000 crore more than what was estimated before (Rs 40,000 crore). Around a fourth of the total expected revenue might come as an upfront payment from the telcos.
Both Airtel and Jio have 5G ready networks. This will allow them to roll out 5G as soon as they are allocated sufficient spectrum. Neither of the telcos would actually need to wait for the dedicated 5G airwaves sale to roll out the next-gen technology.
The telcos can spend 15% to 20% extra on the spectrum in select category A circles and cities. They can use their existing 4G assets to give users a real taste of how 5G would look like.
Until now, Jio, the largest telecom operator in the country, was expected to shell out Rs 20,000 crore, and Airtel was expected to shell out Rs 15,000 crore in the upcoming auctions. On the other hand, Vodafone Idea (Vi) is expected to be quite stiff with its expenditure in the auctions given its financial position as well the spectrum resource it already holds.
Airtel might go after more 900 MHz and 1800 MHz spectrum while Jio will focus on renewing all the expiring spectrum and push for 800 MHz spectrum.
Broader Rollout Only Possible After DoT Offers Dedicated 5G Spectrum
Even though Airtel has demonstrated successful 5G tests with the 1800 MHz spectrum, the broader rollout of 5G won’t be possible until the Department of Telecommunications (DoT) offers dedicated 5G spectrum in the 3300-3600 MHz bands.
With the extra spectrum bought in the upcoming auctions, Jio and Airtel will only be able to offer a limited 5G service in select circles. The 4G spectrum auction is slated to take place from March 1, 2021.