5G auction: Jio cashes in Rs 14,000 crore to DoT; Adani Group put in Rs 100 crore
As the race for the 5G Spectrum Auction heats up, billionaire Mukesh Ambani’s Reliance Jio has made a hefty deposit of Rs 14,000 crore, while rival Adani Group has made an average deposit of Rs 100 crore.
New Delhi, July 18: As the race for the 5G spectrum auction heats up, billionaire Mukesh Ambani’s Reliance Jio has made a hefty deposit of Rs 14,000 crore, while rival Adani Group has made an average deposit of Rs 100 crore. Earnings money indicates the number of radio waves a company can auction.
While the hearty promise of cash suggests that Jio, the country’s largest telco by subscribers, may be very aggressive in bidding in future auctions, Adani Group may be looking to buy the smallest spectrum needed to build a private network. The stipulated cash payments of all four bidders for 5G airwaves rose to Rs 21,800 crore, a level higher than the Rs 13,475 crore paid in the 2021 auction when three players participated. A total of 72 GHz (gigahertz) of spectrum worth at least Rs 4.3 crore will be put into the block during the auction, which is scheduled to begin on July 26. Pre-qualified bidders Reliance Jio has submitted an earnest money deposit (EMD) of Rs 14,000 crore, the highest among the four players in the battle for the spectrum bid.
Adani Data Networks’ EMD stands at Rs 100 crore, indicating subdued and limited demand for spectrum from its side. Earlier this month, billionaire Gautam Adani Group confirmed it was in the running to acquire spectrum, which it says is being used to create a private network to support its businesses from airports to power supplies such as data centers.
Adani Group said its purpose is not in the area of consumer actions. According to the DoT website, Sunil Mittal under Bharti Airtel has invested Rs 5,500 crore in EMD, while for Vodafone Idea the amount is Rs 2,200 crore.
In general, EMD values indicate players’ appetite, strategy, and plans to acquire spectrum in the auction. It also determines the qualification points at which telecom companies align certain spectrums in different circles. Market watchers say the telco has the ability to chase airwaves worth up to 7-8 times the amount of EMDs they surrender, though players tend to keep their heads down for maneuverability and flexibility based on how the auction proceeds and the strategy adopted by opponents.
An industry expert, who did not wish to be named, estimated that Jio could place RM on EMD bids of Rs 1.27 lakh, Rs 48 lakh, Rs 20,000, Rs 20,000, and Adani Data around Rs 700. With an EMD of Rs 14,000 crore, the qualifying points awarded to Jio in the auction will be 1,59,830, the highest among the list of four bidders, according to details released by the DoT.
The qualifying points awarded by Airtel are 66,330 while Vodafone Idea is at 29,370. Adani Data Networks got 1,650 qualifying points based on their contribution. While calculating the qualification of Adani Data Networks, the net worth of Promoter Adani Enterprises was considered, resulting in total net worth of Rs 4,979 crore.
The net worth of Reliance Jio Infocomm, a subsidiary of Jio Platforms Ltd — the unit that holds Reliance’s digital assets — stands at Rs 1,97,790 crore. Vodafone Idea has a negative net worth of Rs 80,918 crore while its paid-up capital is Rs 32,119 crore.
While the 5G spectrum will be auctioned in nine frequency bands, the application calling for notification – a document related to the bid released by the Department of Telecommunications – said that technology companies will be able to acquire 5G spectrum for their captives. non-public network leasing of telecommunications companies. The bid document said the direct allocation of spectrum to technology companies follows an emergency inquiry and recommendations by the sector regulator on aspects such as pricing and modalities of such allocation.
In the last auction in early 2021, Reliance Jio Infocomm put in an actual amount of Rs 10,000 crore, while Bharti Airtel and Vodafone Idea put in Rs 3,000 crore and Rs 475 crore, respectively. In the auction held last year, Reliance Jio picked up spectrum starting at Rs 57,122.65 crore, Bharti Airtel bid around Rs 18,699 crore and Vodafone Idea bought spectrum worth Rs 1,993.40 crore.