Informist, Wednesday, Jun 26, 2024

--RIL: RJio bought 14.4 MHz spectrum in auction for 9.74 bln rupees

MUMBAI – India's second 5G spectrum auction concluded today with airwaves worth 113.41 bln rupees sold through the bidding process, the ministry of communications said in a press release. The government garnered around 12% of the 962.38 bln rupees minimum value that it had estimated for the spectrum on offer. The government offered 10.5 GHz of 5G airwaves, of which only 141.4 MHz was sold.

In 2022, the government had mopped up a record 1.50 trln rupees from the maiden sale of 5G airwaves, with Reliance Jio emerging as the top bidder. This year's final revenue mop-up was even below 778.15 bln rupees collected in 2021 from the 4G auction.

This time, Bharti Airtel Ltd topped the list of buyers by bagging 97 MHz spectrum for 68.57 bln rupees, followed by Vodafone Idea Ltd, which acquired 30 MHz spectrum worth 35.10 bln rupees. Reliance Jio Ltd bought 14.4 MHz spectrum for 9.74 bln rupees.

The participation in this spectrum auction was largely driven by the renewals of the expiring spectrum in the 900 MHz and 1800 MHz bands, coupled with purchases in the 2100 MHz and 2500 MHz bands to strengthen the network. Apart from these, there was no activity in other bands – 26 GHz, 800 MHz, 2300 MHz and 3300 MHz.

"Bharti Airtel and Vodafone Idea have successfully renewed their expired spectrum in 900 MHz and 1800 MHz bands, and further an additional quantum of 87.2 MHz worth 61.65 bln rupees has been acquired by telecom service providers to augment their services," the ministry of communications said.

The auction started on Tuesday at 1000 IST, with five rounds of bidding taking place on the first day. There was not much action today, leading to officials declaring the end of the auction at around 1145 IST, after seven rounds.

"The spectrum auction results have largely been in line with ICRA’s estimates and have fetched the exchequer around 113.40 bln rupees, which translates into annual payout of around 11 bln rupees for a period of 20 years at 8.65% rate of interest for the telcos," said Ankit Jain, vice president and sector head - corporate ratings, ICRA Ltd.

"At these muted participation levels, no material adverse impact on the balance sheet of the industry is expected. The debt levels which stood at 6.4 trln rupees as on Mar 31, are expected to moderate to around 6.2-6.3 trln rupees as on Mar 31, 2025, despite the addition of the deferred liabilities, given the expected improvement in profit generation," Jain said.

Today, shares of Bharti Airtel ended 3.2% higher at 1,459.50 rupees, and those of Reliance Industries gained 4.1% to 3,028.05 rupees on the National Stock Exchange. Shares of Vodafone Idea closed nearly 5% higher at 18.02 rupees. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Darshan Nakhwa

Edited by Maheswaran Parameswaran

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