The auctions in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands are expected to see maximum participation from Reliance Jio Infocomm (Jio), while rivals Bharti Airtel and Vodafone Idea (Vi) may choose to largely fall back upon their spectrum backups, say experts. “The NIA will be rolled out this week,” said a government official aware of the developments.
Industry executives said it takes 45 to 60 days to hold the auction after the issue of the NIA. The NIAs to prospective bidders, likely to only be the existing private telcos Jio, Vi and Airtel, come on the back of the Cabinet’s approval in December for holding the auction of 4G airwaves in March 2021.
The sale—coming at a time when data consumption has increased multiple folds—is expected to fetch the government Rs 3.92 lakh crore based on reserve prices, as per the Centre’s estimates. But analysts expect the sale to generate Rs 40,000 to Rs 50,000 crore, with Jio, the only profit-making carrier, expected to be the main buyer, followed by Airtel, and Vi pitching in for only some airwaves.
They add that bidding intensity will be muted due to the financial condition of the sector with debt of over Rs 7 lakh crore as well as the large quantity of airwaves on sale, besides the strong holdings of Airtel and Vodafone Idea.
But the sale will be critical for Jio. A substantial portion of the market leader’s own airwaves and those it shares with Reliance Communications in the 800 MHz band expires in 12 and 14 circles, respectively, starting July 2021.
Without these airwaves, Jio’s services in these circles will be impacted, making it imperative that the telco bid for them, analysts said. Mukesh Ambani-led Jio, with over 406 million subscribers, also needs additional airwaves to cater to surging data demand and a rapidly growing user base that it expects to touch 500 million.