New Delhi, NFAPost: The Department of Telecommunications on Monday announced that four telcom pre-bidders deposited Rs 21,800 crore as earnest money deposit (EMD) for the upcoming 5G spectrum auction.
Among the telecom companies, Reliance Jio put the maximum amount of Rs 14,000 crore. While Bharti Airtel and Voodafone deposited Rs 5,500 crore and Vodafone Rs 2,200 crore respectively.
Accordng to telecom analyst, the Adanis deposited (EMD) just Rs 100 crore on Monday for the upcoming 5G spectrum auction, really reduced the competitors apprehension that the company will be emerging as a pan India rival
“The investment Adani made is minuscule and it will help them to buy spectrum work just Rs 900 crore. Here, the application will be limited to enterprises and captive networks. The company is expected to use it in a few circles where it has its infrastructure like ports, airports, and power stations,” said Arvian Research.
As part of the auction, the DoT earmarks an EMD for each block of spectrum, which differs from circle to circle and spectrum band to band. Telcos, based on their plan for acquiring spectrum across segments, have to submit an EMD, which indicates how much the operators are willing to spend during the auction.
Jio has made it clear that the company is very aggressive in taking on the competition. It can either buy 100 MHz in the 3.5 GHz band or hit the cap of 130 MHz (40 per cent of the spectrum on offer), for which it has to pay Rs 49,000 crore at the base price, and go for anything between 800 and 1,000 MHz in the millimetre band (which will cost Rs 5,600-7,000 crore). In the millimetre band, it might keep one band (400 MHz) for B2C services and the other band for B2B services.
Analysts say with a war chest of Rs 1.12-1.40 trillion, based on its EMD, Reliance has enough cash to complete two blocks in the 800 MHz band all-India with additional purchases in UP West, Assam, the Northeast, J&K, etc.
Airtel, on the other hand, has been a moderate player. With an EMD of Rs 5,500 crore, it can buy all-India 100 MHz in the 3.5 MHz band, which is more or less like Reliance’s. But in the millimetre band it might go for much less, looking at something like 400-800 MHz.
Vodafone Idea, whose war chest based on its EMD is Rs 17,700-20,000 crore, will focus on 16-17 circles it is concentrating on to buy both in the 3.5 GHz and millimetre bands rather than go all-India.
The strategy is to provide customers 5G services in these key markets rather than go all-India. Analysts say they have enough cash to get going with 50-60 MHz of 5G spectrum in the 3.5 GHz band and with the support of 400-500 MHz in the millimetre band. Such a move will also give them significant savings in spectrum user charges (SUC) because in these bands the outgo is zero.
(With inputs from Business Standard)
