The fourth day of 5G auction on Friday witnessed an intense fight between Bharti Airtel and Reliance Jio for a slice of 4G spectrum in the 1,800 MHz band in the Uttar Pradesh (East) circle. The incremental jump in the total bid value at the end of the fourth day was Rs 232 crore, taking the total commitment so far to Rs 149,855 crore. The same stood at Rs 149,623 crore on Thursday.
The spend by the operators in the UP (E) circle increased to Rs 1,459 crore on Friday from Rs 1,227 crore on Thursday.
One of the reasons for Bharti and Jio fighting for around 5 MHz of spectrum in the UP (E) circle is because the reserve price at Rs 91 crore per MHz is lower than the auction price of Rs 153 crore per MHz in 2021. At the end of the fourth day, the price has moved to Rs 135.09 crore per MHz. So, the operators still have a scope to spend more if the 2021 price is seen as base.
As reported earlier, Bharti has the highest spectrum holding in the 1,800 MHz band in this circle at 15 MHz, while both Jio and Vodafone Idea have 10 MHz each. If the overall spectrum holding, including spectrum in other bands, is taken into account, Bharti has 45 MHz, Jio 41.25 MHz and Vodafone Idea has 45.60 MHz. Therefore, all three operators hold nearly the same level of total spectrum across bands.
However, Bharti also has 6.2 MHz in the 900 MHz band, which is unliberalised – meaning acquired not through auctions but administrative allocation which cannot be used for 4G services. This spectrum is expiring in 2024. Since there’s no spectrum in available for auction in 900 MHz, which is also a 4G band, Bharti wants to acquire an additional 5 MHz in the 1800 MHz band. If it does so, its holding in 1800 MHz will increase from 15 MHz to 20 MHz. Its overall tally in the 900 MHz, 1,800 MHz and 2,100 MHz bands will become 30 MHz.
Jio’s current holding in 1,800 MHz and 800 MHz bands is 25 MHz. If it acquires 5 MHz more, then its tally will be equal to Bharti’s and, if it fails, then Bharti will widen its lead.
As the two fight, financially-weaker Vodafone Idea is also looking to improve its holding in the 1,800 MHz band in the UP (E) circle to maintain a competitive leverage. In this scenario, the possibility of the auctions going on for a few more days cannot be ruled out.