Indian spectrum auction raises almost $10bn of bids

By:
James Pearce
Published on:

Vodafone bids most at $3 billion, followed by Bharti Airtel ($2.13bn), Reliance Jio ($2bn) and Idea Cellular ($1.92bn)

Reliance Jio splashed more than $2 billion on new spectrum, as the Indian spectrum auction close after raising almost $10 billion in bids.

After five days of bidding, the Indian government raised $9.9 billion, well short of the $84 billion worth of bandwidth on offer as operators bought less than half of the total on offer.

Challenger Reliance Jio, which launched last month and is backed by India’s richest man Mukesh Ambani, acquired the rights to use 269.2MHz of spectrum across all 22 service areas for Rs13,672 crore.

“We have expanded our spectrum footprint thereby significantly enhancing capacity of our all-IP data strong network and ensuring world class services for all Indians. Jio is committed to taking India to global digital leadership by bringing the power of data to all Indians,” said Ambani.

The biggest spender during the auction was Vodafone, landing spectrum across all of its key circles after splashing out more than $3 billion on the 20-year agreements.

Vodafone India bought a total of 2 x 82.6 MHz FDD and 200 MHz TDD spectrum in the auction, giving it multi-band 4G capability operating across the 1800, 2100 and 2500 MHz bands. It now has 4G capability in 17 circles.

India’s largest telco, Bharti Airtel Ltd, in a statement said that it has acquired 173.8MHz of spectrum across the 1,800/2,100/2,300MHz bands for a total consideration of Rs14,244 crore ($2.13 billion).

Idea Cellular acquired 349.20MHz of spectrum at an aggregate bid value of Rs12,798 crore, for a total spend of $1.92 billion at the auction.

The Indian government was offering spectrum across seven bands (700MHz, 900MHz, 1,800MHz, 2,100MHz , 2,300MHz and 2,500MHz) but came under fire for pricing the premium 700MHz bandwidth too highly. Despite being better for travelling through walls, the lower frequencies received less bids than the higher ones.

“In fact, the financial strain on the industry and a high reserve price are the major reasons why the 700MHz band did not attract bidders,” Rajan S. Mathews, director general of industry lobby group the Cellular Operators Association of India told Livemint. 

“On many an occasion, COAI has raised the issue of the high reserve price on the band, and how this could affect investor interest during the auction.”