Jio, Airtel Ready to Buy Pan-India 5G Spectrum, VIL Uncertain: Report

Reliance Jio and Bharti Airtel are poised to buy Pan-India 5G spectrum, but Vodafone Idea’s bids for the radio waves remain uncertain, according to a BofA Securities report released on Monday.

The report found that any telecom company that has not bid for 5G spectrum in a certain circle would find it difficult to roll out 5G on the existing 4G bands, as the existing networks are saturated and therefore have limited spare spectrum available stand could be cut out.

“A higher reserve price is likely to discourage new telcos from bidding in the auction and only telcos with strong balance sheets like RIL and Bharti are able to buy pan-India 5G spectrum. It remains unclear how VIL would fund its 5G offerings,” the report said.

BofA research analysts believe that Vodafone Idea (VIL)’s management has focused on its top core constituencies and the company may be selectively bidding in its 3G and 4G core constituencies.

“We believe that post-5G VIL would be even more vulnerable if it did not have Pan-Indian 5G spectrum,” the report said.

An email inquiry sent to VIL about the report did not trigger an immediate response.

The BofA report estimates that operators may be interested in 3.5GHz in this auction as it is the primary band for 5G, while the premium band is 700MHz due to its high prices and its similar propagation characteristics to 800 and 900 limited interest might encounter MHz band.

“Interest on 28GHz is likely at the next auction, even if the government decides to auction this time,” the report reads.

The government expects to hold the next spectrum auction round in late June or early July. The 5G services are expected to be rolled out in the country from August to September.

The telecoms ministry is expected to refer the proposal to auction 5G spectrum to the Union cabinet for final approval this week.

The Telecom Regulatory Authority of India (TRAI) has recommended a mega auction plan of over Rs. 7.5 lakh crore for over 1 lakh megahertz spectrum if the government allocates it for a 30 year period.

In the case of 20 years, the total value of the proposed spectrum auction will be around Rs. 5.07 lakh crore at reserve, according to back cover calculations.

Since large parts of the spectrum remained unsold in the last two auctions, TRAI has recommended that radio waves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and new slots of 600 MHz be allocated sell , 3300–3670 MHz and 24.25–28.5 GHz.

Meanwhile, BofA Securities expects Jio to be aggressive when it comes to deploying 5G, particularly standalone 5G, which would force other telecom players to frontload capital investments as well.

“Given the problems in the semiconductor supply chain and the relatively higher price points, a key challenge may lie at the front of the device ecosystem,” the report states.

BofA Securities said the government will also likely consider allocating or auctioning off E and V bands for backhaul, which would help reduce reliance on fiber backhaul connectivity, particularly in Tier 2 and Tier 2 -3 cities.

“The timing of this is not unknown, but the government is keen to assign the band as soon as possible,” the report said.


https://gadgets360.com/telecom/news/jio-airtel-buy-pan-india-5g-spectrum-uncertainty-vodafone-idea-bid-bofa-securities-report-3003876 Jio, Airtel Ready to Buy Pan-India 5G Spectrum, VIL Uncertain: Report

Ryan Sederquist

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