The Mukesh Ambani led telecom operator, Reliance Jio has been in the industry for three years now, and in these three years, the telco has amassed a massive number of subscribers beyond 300 million and brought various changes to the industry given its pricing tactics. However, all of this has been based on Reliance Jio’s success with a 4G only network. The telecom operator is the only one in the country which boasts of the “4G only” title, and it has done a good job of attracting subscribers with the 4G high data speeds and better services. But, all of this has been possible because Reliance Jio has been using 4G spectrum, and in the upcoming auctions as well, the telco awaits the sale of the 4G auction eagerly. But why is that? Let’s take a look.
Reliance Jio's 800 MHz Airwaves in 18 Circles
As per an ET report on the matter, Reliance Jio has currently been using the spectrum owned by the bankrupt telecom operator, Reliance Communications, on a sharing basis. The airwaves which belong in the 800 Mhz band are owned by the insolvent telecom operator, RCom, but courtesy of a sharing arrangement which Reliance Jio had struck in its early days, the telco has been able to relay a countrywide 4G network on the 800 MHz waves. However, now these airwaves are about to expire in July - August 2021 in 18 circles as per the analysts and that is the reason why Reliance Jio is awaiting the auction of 4G airwaves so that it can add the airwaves to its set of owned resources for the countrywide 4G network. With the spectrums due to expire in a matter of less than two years, the telco will need to buy back this spectrum to ensure that it keeps up with the growing subscribers and the data demands on its 4G network.
Reliance Jio in Similar Situation as Bharti Airtel in 2014
The analysts have also noted that Bharti Airtel and Vodafone Idea will also need to buyback their expiring airwaves in eight circles, but these airwaves would be in the less expensive 1800 MHz band as opposed to Jio’s pricier 800 MHz band. To recall, back in 2014 and 2015, Idea Cellular and Bharti Airtel had to buyback their airwaves too before they expired. These airwaves were in the 900 MHz band, and both the telecom operators had paid a premium for these airwaves which eventually led to the high debt situation which the merged telco, Vodafone Idea, is in today.
Reliance Jio to Keep Up with Growing Data Demand
Rajiv Sharma, co-head of research at SBICap Securities said about this issue, “RCom’s 800 Mhz spectrum has played a critical role in Jio’s pan-India 4G launch, and an early auction will help Jio regain these crucial airwaves to ensure business continuity and maintain quality of its countrywide 4G coverage, especially as the ecosystem for other sub-Ghz bands such as 700 Mhz is not developed, besides their exorbitant pricing that makes them unfeasible to buy in an auction.”
Reliance Jio currently uses RCom’s airwaves in 18 circles and out of these 18 circles, airwaves in 17 circles will expire in July 2021, and one more circle will lapse in August 2021. Reliance Jio holds 49 units of spectrum across these circles, and in the upcoming auctions, around 59 units of such spectrum would be put on sale. Now although Reliance Jio has airwaves in the 1800 MHz and 2300 MHz spectrum in all 22 circles, the 800 MHz is a premium band which is the most efficient for 4G use as per the experts. This is the reason why Reliance Jio is in for the early auction of airwaves because it needs to keep up with the growing demand for data services and also to cater to higher coverage.