Vodafone Idea and Bharti Airtel Likely to Skip 5G Spectrum Auction if it Happens This Year

In August 2018, Trai released price recommendations on 700 Mhz band and 5G spectrum, post which analysts and telecom operators expressed their disappointment on the pricing

Highlights
  • Reliance Jio is actively pushing the government for an early spectrum auction
  • Bharti Airtel and Vodafone Idea may back off the 5G spectrum auction this year

Telecom operators, Bharti Airtel and Vodafone Idea, will likely skip the 5G spectrum auction if the government decides to held it this year. According to an ET Telecom report, both Airtel and Vodafone Idea will miss the auction owing to higher prices recommended by Trai and also the cash crunch issues. As you might be aware of by now, Reliance Jio is the only telecom operator making profits in the country, thanks to its aggressive subscriber addition, while other telcos have been posting losses for a while now. However, if the government decides to keep the auction in the calendar year 2019, Reliance Jio will take active participation so that it can stay ahead of other telcos and also roll out the services first. We have been hearing for a while that Airtel and Vodafone Idea are opposing the 5G spectrum auction this year as they’re slowly getting back into posting profits.

Bharti Airtel Believes the Prices of 5G Spectrum are Way High

When Trai released the auction prices of the 5G spectrum, every telco expressed their disappointment on the prices. “It doesn’t make sense for us to buy at these levels when the ecosystem won’t be developing for the next two to three years,” a top Bharti Airtel official told ET Telecom. The scenario is pretty much similar to 2016 spectrum auction; To recall, in the previous auction which was held in 2016, telecom operators ignored the entire 700 Mhz spectrum because of steep prices. Later on, Trai said that it would re-auction the 700 Mhz spectrum lowering the prices, but that didn’t happen.

The Bharti Airtel official further added that “a telco would have to shell out Rs 50,000-Rs 55,000 crore for 100 MHz and service the debt for the next three years, despite having no returns.”

In August 2018, Trai released price recommendations on 700 Mhz band and 5G spectrum, post which analysts and telecom operators expressed their disappointment on the pricing.

Vodafone Idea Isn’t Ready to Go for Big 5G Deployments

Vodafone Idea, which is currently the leading telecom operator in India, also backing off from the 5G spectrum auction this year. Vodafone India and Idea Cellular announced merger back in 2017 and it was formed last year. The telco is still in the process of merging the networks and analysts believe that Vodafone Idea is not yet ready for big 5G deployments.

Right now, Vodafone Idea is focusing on increasing its 4G presence in key markets and the company is incurring a lot of losses with every passing quarter, so it’ll be hard for the company to invest in 5G this year. Also, Vodafone Idea does not have pan-India 4G coverage like Bharti Airtel and Reliance Jio, which will be a crucial factor for any telco to invest in 5G.

Reliance Jio to Invest Heavily in 5G

On the flip side, we have Reliance Jio, which is actively pushing the government for 5G spectrum auction. Jio is the lone LTE-only telco in India right now with Airtel trying its best to match Jio in terms of 4G availability. At the moment, it’s unknown when the government is planning to hold the next spectrum auction.

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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Love AirtelChetanKiran Fernandes | GoaADAMsaket Recent comment authors
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Kiran Fernandes | Goa
Kiran Fernandes | Goa

Oh, please do. Jio getting almost all the 5G spectrum is what matters. 5G might be a little pricey as a lot of money will go in setting up the network, but it’ll be beneficial in the long term. Arpu is a worthless measure today, and Jio knows it.

saket
saket

yes, i agree. let AVOID continue its habit of, delayed 3G , patchty 4G coverage, and now missing 5G bus. Although i agree, by seeing telcome sector, it’s look like spectrum prices very high, even if u look at gloabal prices 5G spectrum prices very high. But considering opportunity (unknown market development ) and span of 20 years and Bharat’s( india) population and upcoming economy , i still feel. Price are just above avveragfe level and Telco like JIO can fully recover cost of spectrum+eqipment cost within few year and AVOID can also be profitable, only if they stop Looting… Read more »

Chetan
Chetan

What about affordable devices from which 5G can be available and used?

Kiran Fernandes | Goa
Kiran Fernandes | Goa

Saket, yeah the price is high, but consider the number of mobile users in India. It’s way more than other countries. It could be less than China, but, eventually, it’s good enough for the operators to get ROI within a year.

Chetan
Chetan

Within a year? Are you serious?

Love Airtel
Love Airtel

Firstly, no one is looting anything. Compare the prices of telecom with even China and see.

Love Airtel
Love Airtel

Cheap Jio users won’t want to pay.

Yukthi Raj
Yukthi Raj

If the spectrum auction will happen this year and voda-Idea, Airtel will not take part… Then imagine who will make gains? Jio will get the spectrum in base rates and also it will surely lower the income to the Govt. which indirectly affects each of us. In my opinion it is not necessery to run behind 5G, 6G and 10G’s… Just provide us the better coverage with VOLTE facility with speeds upto the 4G standards.

City
Trivandrum
Operator
Idea Cellular
DTH
Sun Direct
ADAM
ADAM

We Indians adjust wayy too much, Imagine if this Kind of attitude is taken by whole world. I said Enough of all this . India has a capitalist economy . Survival of the strongest and fittest .No one care about you if you are slow ,weak,lazy or poor .Its their problem if they are not capable of spending money .They have already looted us for years
I say go jio and if someone is better than them i support them
AT the end of the day competition is good for us customers

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