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5G Auction Day 5: Proceeds near Rs 1.5 trillion

At the end of the fifth day, the price has moved to Rs145.47 crore per Mhz, so the operators still have some scope to spend more if the 2021 price is seen as the base price.

5G Auction Day 5: Proceeds near Rs 1.5 trillion
The prime reason for Bharti and Jio fighting for getting around 5 Mhz of spectrum in the 1,800 Mhz band in UP (E) is because the reserve price for this spectrum here is Rs91 crore per Mhz, which is lower than the auction price of Rs153 crore per Mhz in 2021.

The race between Bharti Airtel and Reliance Jio to acquire a larger slice of 4G spectrum in the 1,800 Mhz band in Uttar Pradesh (East) saw the total proceeds from the auction inching closer to Rs1.5 trillion at the end of the fifth day on Saturday. With an incremental jump of Rs112.18 crore, the total amount mopped up so far is Rs149,967 crore against Friday’s Rs149,855 crore.

The total spend by operators in UP (E) now stands at Rs1,571 crore against Rs1,459 on Friday. The auction will continue on Sunday as well.

The prime reason for Bharti and Jio fighting for getting around 5 Mhz of spectrum in the 1,800 Mhz band in UP (E) is because the reserve price for this spectrum here is Rs91 crore per Mhz, which is lower than the auction price of Rs153 crore per Mhz in 2021. At the end of the fifth day, the price has moved to Rs145.47 crore per Mhz, so the operators still have some scope to spend more if the 2021 price is seen as the base price.

As reported earlier, Bharti has the highest spectrum holding in the 1,800 Mhz 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 is at 41.25 Mhz and Vodafone Idea has 45.60 Mhz. Therefore, all the three operators hold nearly the same level of total spectrum across bands.

However, Bharti has 6.2 Mhz in the 900 Mhz in addition, which is unliberalised — which means acquired not through auctions but administrative allocation and which cannot be used for 4G services. This spectrum will expire in 2024. Since there is no spectrum available for auction in the 900 Mhz, which is also a 4G band, Bharti wants to acquire 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 bands of 900 Mhz, 1800 Mhz, 2100 Mhz will become 30 Mhz.

The current holding of Jio in 1,800 Mhz and 800 Mhz is 25 Mhz. If it acquires 5 Mhz then its tally will be equal to Bharti’s and if it fails, then Bharti will widen its lead.

As the two fight, the financially weaker Vodafone Idea is also looking to improve its holding in the 1,800 Mhz in this circle to maintain competitive leverage. In this scenario, the possibility of the auctions continuing for a few more days cannot be ruled out.

The reason for this intense fight for 4G spectrum band in UP (E) circle could be that it’s the most populous — population at around 145 million and subscriber base of 90 million. Of this, Bharti Airtel has the highest subscribers at 37.47 million, followed by Reliance Jio at 32.93 million and Vodafone Idea at 20.23 million.

Meanwhile, Union minister for communications, electronics and information technology Ashwini Vaishnaw said on the sidelines of an event that 5G roll-out will happen from October and “within a year or so, we should have a good rollout in the country”.

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