India's 5G auction starts: Reliance Jio, Airtel, Adani among bidders
India's first 5G spectrum auction is now underway and will go on till 6pm today. The number of days of the auction will depend on demand. 5G airwaves to the tune of 72GHz at a base price of Rs. 4.3 lakh crore are being sold, and four players—Reliance Jio, Vodafone Idea, Bharti Airtel, and Adani Data Network—are in the race.
Why does this story matter?
This auction involves millimeter wave band (mmWave) that lies between 24-100GHz. These short-wavelength waves promise superior speeds and low latencies. India wants to catch up with countries that have had 5G network for years now. Thus, it is permitting winning bidders to pay in 20 equal installments with no payment upfront. The Centre hopes to earn around Rs. 70,000-1 lakh crore from the auctions.
How much spectrum is up for bidding?
The Centre is auctioning spectrum in various frequency bands. They include low (600MHz, 700MHz, 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz, and 2,500MHz), mid (3,300MHz), and high (26GHz). The spectrum will be assigned to winning bidders for two decades and they do not have to pay spectrum usage charges (SUC). Also, there is no need to submit Financial Bank Guarantee (FBG) and Performance Bank Guarantee (PBG).
Jio is expected to be the highest bidder
To participate in the auction, the participants have deposited a combined Rs. 21,800 crore in Earnest Money Deposit (EMD). Reliance Jio is the highest depositor (Rs. 14,000 crore), followed by Airtel (Rs. 5,500 crore), Vodafone Idea (Rs. 2,200 crore), and Adani Data Networks (Rs. 100 crore). The companies are expected to purchase mid and high-band spectrum to roll out 5G technology-based services in India.
This auction marks Adani's entry into the telecom industry
Adani is investing heavily in data centers and wants to make it an enterprise business that will take on Indian telecom companies as well as global giants such as Amazon and Google. Its entry will ensure aggressive bidding for the C-band (3.3-3.67GHz), as these airwaves will be offered in metros and tier-1 cities, where 5G adoption will be faster.
5G pilot testing has already started
The Telecom Regulatory Authority of India (TRAI) has commenced pilot testing of the 5G network in select areas, including Bengaluru, Delhi, Bhopal, and Kandla port in Gujarat. Telecom firms like Reliance Jio, Airtel, and Vodafone Idea also conducted trials of their own at the MG Road Metro station in Bengaluru and GMR International Airport in New Delhi, among other places.
5G services should be offered by early-2023
5G services are expected to be rolled out to Indian users by the end of this year or early 2023. Airtel claims that once the auctions are concluded, it will launch its services within four months.