Reliance Communications (RCom), in a new move, has handed over 70 units of unliberalised or non-auctioned spectrum in the 1800 Mhz band to the Department of Telecommunications (DoT). RCom moved over to this option when the company could not find any buyers for the spectrum and the Anil Ambani led telco wasn’t in the position to spare Rs 1,500 crore which was the requirement for starting up 4G services. A person aware of the ongoing said that Reliance Communications decided on this matter after the telco stopped its wireless business in the month of November last year. The telco also could not find any buyers for these airwaves, since setting them up required liberalisation. Also, if the telco wanted to start 4G services on its own it would have to pay the difference in the startup cost of the spectrum which was allocated by DoT 20 years ago to RCom. The current price according to those parameters stood at around Rs 1,500 crore.
To add on this fact, the spectrum which Reliance Communications handed over to DoT was only valid till July-September 2021 in about 15 circles.
As per an ET report, Reliance Jio Infocomm is also keen on buying telco’s unsold, liberalised spectrum in the 850 Mhz band apart from the other airwaves deal which it has made with Reliance Communications. When posed with questions from ET both the companies declined to reply.
If Reliance Jio Infocomm wants to move forward on buying more spectrum from Reliance Communications, this seems to be the right time for making the strike since the government has also done some relaxation for the telcos by easing the limit of 50% on carriers holding airwaves within each band after mergers. Given the situation, it is likely that Reliance Jio might make a deal worth Rs 4,000 crore to buy RCom’s unsold 850 Mhz spectrum. ??UBS brokerage informed that If Reliance Jio makes this deal, it will take its countrywide airwave holdings to 1,106 units which will be more than Airtel’s 1088.7 Mhz and also more than the combined entity of Vodafone-Idea which will have 1132.5 Mhz.
Not only this, Reliance Jio’s acquisition of this new spectrum would further boost Jio’s stronghold in the market by significantly boosting the quality of 4G LTE in India which the company provides.
