The 5G auction resumes on Day 3, with Jio spending over Rs 84,000 crore on spectrum
Analysts estimate that market leader Reliance NSE 1.57 percent Jio’s estimated spends after Day 2 of India’s ongoing 5G spectrum sale have risen to around Rs 84,300 crore.
The market leader
Reliance
1.57 percent of the NSE Analysts estimate Jio’s spending on Day 2 of India’s ongoing 5G spectrum sale to have risen to roughly Rs 84,300 crore, as it is expected to have purchased 130 units of mid-band (3.3-3.67 GHz) airwaves in additional to the costly 700 MHz spectrum, high-band (26 GHz), and those in the 1800 MHz band.
Analysts estimate that market leader Reliance NSE 1.57 percent Jio’s estimated spends after Day 2 of India’s ongoing 5G spectrum sale have risen to around Rs 84,300 crore, as it is expected to have obtained 130 units of mid-band (3.3-3.67 GHz) broadcasting in addition to the pricey 700 MHz spectrum, high-band (26 GHz), and those in the 1800 MHz band.
Bharti Airtel
NSE -1.19 % and Vodafone Idea’s expected post-Day 2 spectrum spends are roughly Rs 46,100 crore and Rs 18,400 crore, respectively, as they added extra mid-band, high-band, and airwaves in the 1800 MHz and 2100 MHz bands. Both, however, have avoided the costly 700 MHz spectrum. Adani Data Networks, a new entrant, is thought to have focused solely on pan-India 5G airwaves in the high-band, limiting its spectrum spends to about Rs 800-900 crore for captive needs.
The 10th round of bidding in India’s first-ever 5G spectrum auction was underway on Day 3 (Thursday), with the government anticipating the sale to complete later today.
Prices for certain bands increased on day two. According to a Credit Suisse research, the price of the 1800 MHz band has increased by 20% from day one to Rs9,700 crore, while the price of the 2100 MHz band has increased by 19% to Rs3200 crore. The price of the 3300-3600 MHz band increased by 3% to Rs80,600 crore, while the price of the 26 GHz spectrum increased by 1% to Rs14,700 crore.
“After Day 2, RJio’s dividend is projected to have increased to Rs 84,300 crore, while Bharti and Vi’s prospective spectrum payouts are estimated to have increased to Rs 46100 crore and Rs 18400 crore, respectively,” ICICI Securities NSE 1.38 percent wrote in a note. It went on to say that Jio has most likely bid for 130 MHz of 5G mid-band airwaves (up from 100 MHz on Day 1).
On the second day of the 5G spectrum auctions, the government raised another Rs 4,000 crore, bringing the total proceeds from the sale to Rs 1.49 lakh crore.
“Assuming that telcos fully employ the deferred payment option (i.e., 20 years), the government is projected to receive $1.8 billion as an upfront payment from the 5G auctions in FY23 (NPV protected with a 7.2 percent interest rate),” Credit Suisse wrote in a note.
In afternoon trade Thursday, shares of Jio’s parent company, Reliance Industries NSE 1.57 %, were up 1.2 percent to Rs 2,448.75 on the BSE. Bharti Airtel and Vi shares fell 0.5 percent and 0.3 percent, respectively, to Rs 671.65 and Rs 8.73. Adani Enterprises NSE 0.07 percent shares were also down 0.2 percent to Rs 2,542.55 on the exchange.