(Bloomberg) — Billionaire Mukesh Ambani-led Reliance Jio Infocomm Ltd. spent more than $11 billion, emerging the top buyer in India’s airwaves auction as it sought to cement its edge over the rivals.
The South Asian nation sold spectrum, including 5G airwaves, worth 1.5 trillion rupees ($19 billion) across multiple bands, India’s telecom minister Ashwini Vaishnaw told reporters in New Delhi on Monday, confirming the government’s forecast of a record collection.
Reliance Jio, India’s largest wireless operator, bought 24,740 megahertz of airwaves for 880.78 billion rupees, he said.
Smaller rivals Bharti Airtel Ltd. and Vodafone Idea Ltd. spent 430.8 billion rupees and 188 billion rupees respectively as some of the country’s richest tycoons faced off for 5G rights that could decide who dominates the digital era in a country of billion-plus people.
Adani Data Networks Ltd., the surprise entrant from Gautam Adani’s conglomerate, bought airwaves across six Indian states for 2.12 billion rupees in its debut auction, allaying fears of a bigger telecom play for now.
The firm, controlled by Asia’s richest person, had said it was buying airwaves to build a private 5G network after the initial frenzy around its entry last month.
The latest auction spending by Ambani’s retail-to-refining conglomerate underscores its transformation from being an energy giant to a tech titan — a process that can be accelerated with the help of speedy 5G airwaves.
Bharti and Vodafone Idea also need 5G networks to claw back market share from Reliance Jio as well as bolster their profits.
‘Lion’s Share’
“The current auctions have played out much as they would have, with the incumbents divvying up the lion’s share in proportion to their size and scale,” said Utkarsh Sinha, managing director at Bexley Advisors, a boutique investment bank in Mumbai.
While Adani’s entry probably urged the operators to to bid “more aggressively,” the ports-to-power group “bid the way they said they would — for private networks.”
Source: Telecom Minister briefing, company statements
Reliance Jio will “roll-out the world’s most advanced 5G network across India,” it said in a statement, adding that its “unique 700 MHz spectrum footprint will make it the only operator providing true 5G services across India.” It has started field trials for 5G services and plans to launch nationwide operations very soon, parent Reliance Industries Ltd.
said last month.
Bharti followed “a deliberate strategy” to acquire spectrum at a “substantially lower relative cost” compared to its competition, Chief Executive Officer Gopal Vittal said in a statement Monday.
“This will allow us to raise the bar on innovation” and provide the best 5G experience in India, he said.
Vodafone Idea, a joint venture between Vodafone Group Plc and billionaire Kumar Mangalam Birla’s Aditya Birla Group, bought airwaves to strengthen its pan-India 4G services as well as “embark on its 5G roll-out journey,” it said in a statement.
The smallest of three private sector operator is also relying on parent Vodafone’s global experience in deploying 5G services.
Mapping Ambitions
It also marked the first time the Adani Group and Ambani-led firms were vying for the same asset, making it a keenly watched contest as telecom operators and analysts tried to map the former’s ambitions in the sector.
Ambani disrupted India’s telecom sector in 2016 with ultra-cheap services and has dominated it since.
The airwave auction will bolster the Narendra Modi-led government’s finances at a time when it seeks funds to tame inflation and rein in the fiscal deficit.
The bidding amount surpassed estimates by rating company ICRA Ltd., which said in June that the spectrum sale could raise as much as 1.1 trillion rupees.
The Indian government managed to sell 51,236 megahertz of telecom airwaves, or 71% of the 72,098 megahertz that was put on the block by the end of the seventh day in an auction that started July 26.
India offered airwaves for a 20-year tenure in frequency bands ranging from 600 megahertz to 26 gigahertz and has eased payment terms.
The companies can make full or part upfront payment for the total bid amount within 10 days of auction completion leading to lesser financial outgo.
The buyer will also have an option to avail a moratorium, offered by the government, for the corresponding number of years of payment. The second option is to make payment in 20 equal annual installments.
India will get 133.65 billion rupees upfront from the auction, the minister said.
(Updates with details throughout.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
