Jio Spends Rs 57,000 Crore For Buying Spectrum From Govt; Airtel, Vi Spends Less Than Half

On the day one of 4G Spectrum Auction, Reliance Jio has came out as the most aggressive bidder. According to brokerages on Monday, the telecom disruptor spent around 42000 – 50000 crore whereas the archrival Bharti Airtel bid for 25000 crore worth of airwaves.

Today is the second day of the 4G Spectrum Auction and will end later today.

Spendings on Spectrum By Jio, Airtel, Vi

According to Goldman Sachs, multinational investment bank and financial services, Jio has spent almost 50000 crore rupees whereas Airtel has spent half of the amount and Vodafone Idea has renewed its spectrum by spending almost 3000 crore rupees.

According to Axis Capital, brokerage firm the bidding estimated is 42000 crore spent by Jio, 25000 crore by Airtel and 7000 crore by Vi.

According to Goldman Sachs, as far as total spectrum is concerned, Jio Jio may have largely closed its gap with Bharti and Vodafone Idea. But in the sub-GHz spectrum bands, Bharti may have participated aggressively eventually maintaining its lead vs Jio.

Also, materially, Bharti’s spectrum holding remains higher than that of Jio as the data carried by the Jio network is twice to that of Airtel.

Opening Day Bids 71% Higher

Even the government must be in stupor, as it made 77146 crore on the opening day which is 71% higher than what was expected to make as the telecom majors renew their airwave permits which are expiring from July.

$5.3 billion of $10.5 billion spectrum bid, which looks high as compared to the previous auctions, could be coming from the renewal.

Out of these renewals, Jio had a $3.2 billion spectrum expiring this year whereas for jio it was 2 billion $.

Out of the additional 5 billion dollars, bulk of it is likely to be driven by Jio in the 800MHz band. Out of the total US$10.5 billion bid, this band has received over 50% of total bids.

In the 800MHz, Jio had 99 MHz for renewal whereas this band has seen a bidding for nearly 150MHz.

In the 900 MHz band, Airtel is bidding for 38MHz of spectrum even though mere 12.4MHz of spectrum up for renewal. This comes as Airtel’s plan to complete pan India footprint in sub-GHz band.

In the view of growing data traffic, Airtel and Jio are believed to be strategically adding spectrum in 1800MHz and 2300MHz.

On Monday, Communications minister Ravi Shankar Prasad said that the Day 1 bidding represented 60% of the spectrum put to auction if the 700 Mhz and 2500 Mhz bands are excluded.

An upfront payment of Rs12,000-13,000 crore in FY21 and a similar amount in FY22 shall be received by the government, said Telecom secretary Anshu Prakash.

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