Jio auction spends: Reliance Jio 5G spectrum to cost over Rs 80,000 and expensive 700 MHz: Analysts | Techno Glob

Telecom market leader Reliance Jio’s estimated cost of over Rs 80,000 crore after Day 1 of India’s 5G spectrum sale as it may have bought expensive airwaves in the 700 MHz band, pan-India, in addition to mid-band (3.3 MHz). -3.67 GHz) and high-band (26 GHz) airwaves, analysts said.

Bidding was underway on Day 2 (Wednesday) of India’s first 5G spectrum auction in the fifth round, with the sale likely to end around mid-day.

Shares of Bharti Airtel and Vi fell 0.55% and 0.11% to Rs 680.05 and Rs 8.82 on the BSE. Shares of Reliance Industries – Jo’s parent company – also fell slightly, down 0.3% to Rs 2,414 on the BSE in morning trade on Wednesday. Shares of Adani Enterprises, meanwhile, were up 0.02% at Rs 2,560.95.

Bharti Airtel and Vodafone Idea’s spectrum spend is set to be lower at around Rs 45,000 and Rs 18,400, respectively, as they avoid the expensive 700 MHz band and instead focus on the mid-range and high-band 5G airwaves. In the 1800 MHz, 900 MHz and 2100 MHz bands. New entrant Adani Data Networks has apparently focused on India’s 5G airwaves only in the high end, limiting its spectrum to Rs 1,000 crore.

“Our analysis shows that Jio was the highest spectrum bidder at Rs 80,100 crore and chose 10 MHz in the 700 MHz band,” ICICI Securities said in a note.

The brokerage reckons Airtel has bid for Rs 45,000 crore worth of spectrum, spending 20% ​​more than its baseline, with the extra money going into the 1800 MHz and 2100 MHz bands. He said Vi had offered Rs 18,400 crore for 5G spectrum, while Adani Data Networks may have picked only pan-India 26 GHz spectrum for captive needs.

“Adani seems to have bought 26 GHz in 20 circles (except Delhi and Kolkata) and its total spectrum purchase is likely to be Rs 900 crore. We believe it should have bought 200 spectrum units in all circles except Gujarat, where it would have bought 400 units,” he said. said ICICI Securities.

The government received record bids of Rs 1.45 lakh crore after four rounds on Day 1 of the ongoing 5G spectrum auction. With strong interest in mid-band (3.3-3.67 GHz) and high-band (26 GHz) airwaves, the important 700 MHz band saw its first bid. All offers were at base price.

According to IIFL Securities, Jio’s involvement in the (approximate) 700 MHz band will negate future reserve price cuts for these airwaves. “Tender data also suggests that in the 3.5 GHz band, both Bharti and Jio may offer 100 units in all circles, while Vi may go for 50 units in 17 circles,” the brokerage said.

Excluding the spectrum usage charge (SUC) from current auctions, the 26GHz band saw good demand, with 72% of the spectrum on offer receiving bids, according to Nomura Research.

A Japanese broker said access to the 700 MHz band could give the bidder (read: Jio) an advantage in terms of network quality, especially indoors, and that could raise investor concerns about further spectrum releases in the next round of spectrum auctions for operators. , has not submitted a bid for the 700 MHz band in this auction.

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