Reliance Jio, a subsidiary of Reliance Industries, won airwaves worth USD11 Billion, and emerged as the biggest spender in India’s USD19 billion 5G spectrum auction. India is the world’s second largest mobile market, and is gearing up for the launch of high-speed 5G services across the country.
The government of India plans to launch the roll-out of 5G services by October this year. 5G promises to provide data speeds of up to ten times faster than current 4G speeds. All over the world, the emergence of 5G network services is being viewed as essential for new technologies like Ai and self-driving vehicles.
India’s telecom minister, Ashwini Vaishnaw, said that telecom companies bought 71 percent of a total 72GHz offered in the auction that concluded yesterday. The auction also saw the participation of other telecom operators like Bharti Airtel and Vodafone Idea. In addition, a unit of Adani Enterprises Ltd. also participated in the auction.
Airtel won spectrum valued at USD5.4 billion, while Vodafone bagged spectrum worth USD2.4 billion in the recently concluded 5G spectrum auction.
The telecom minister said that the spectrum purchased by the telecom operators was sufficient to provide coverage to all the circles in the country. He also said that he expected the 5G coverage in the nation to be very good in the next three years.
Private 5G networks in the pipeline
Despite earlier concerns that they stand to lose almost 40 percent of their potential revenue due to enterprise allotment for private 5G networks, the telecom operators bid aggressively for the spectrum offered in the auction.
The newest participant in the spectrum auction, Adani Enterprises, purchased airwaves worth almost USD27 million. The company does not intend to roll out consumer services, but instead aims to enter the private network space.
In an effort to aid the finance-strapped telecom sector, the government will allow winners of the auction to pay the bid amounts in twenty equal annual installments.
Both Airtel and Vodafone have faced a pricing pressure since a price war triggered by Jio in 2016. Both companies have reported losses in recent years, and have also been under pressure by spectrum dues from earlier auctions. Airtel, however, recently hiked prices for mobile data, which has seen it slowly return to profit.
Chief Executive Officer of Airtel, Gopal Vittal stated that the spectrum acquisition was part of a deliberate strategy to purchase spectrum assets and a relatively lower cost compared to the competition.
In a separate announcement, Reliance Jio said that it would be ready for a pan-India rollout of 5G services in the shortest possible time.