5G Auction Stretches To 4th Day; Rs 1,49,623 Crore Of Bids Received From Reliance, Airtel, Adani and Vodafone
The 5G spectrum auction has started, and now, has stretched to 4th day. There are speculations regarding how much the government could make out of the same.
As of now, Rs 1,49,623 crore worth of bids have been received so far.
In best to best scenario, as per the speculations, companies can spend up to 8-9 times of their EMDs. This would mean that the outflow for Jio could be 1.27 trillion, for Bharti and Vodafone Idea could be 48,000 crore and 20,000 crore respectively.
This would take the total spend on 5G to 1.95 trillion. Which also means that large part of the entire 5G spectrum shall be unsold. The percentage of unsold spectrum in 2016 and March 2021 was around 60%. This was due to the fact that the operators found reserve price to be too high.
Also, there is no scarcity value of the spectrum since there are only three players in the market.
Scarcity value is the value of increased value of something when it is scarce.
Total Quantum Put Up for Auction
A total of 72 Ghz spectrum across different bands will be up for sale, which at reserve price is worth Rs 4.3 trillion.
Earlier a part of payment was upfront and the operators had to pay atleast 25%/33%/50% of the total bid amount upfront. The remaining was to be paid as equal instalments spread over 20 years.
This time around, there is no upfront payment required and telcos can spread the entire payment over a 20-year period.
The telcos wont have to pay any spectrum usage charge starting this auction. For the operators this would mean a yearly savings of Rs 700-2,100 crore
5G Services Availability to End Users
The rollout for the same is aimed by government to begin from August 15 onwards. As of today, out of the total smartphone base, only 7% happens to be 5G-enabled. Hence the roll out of 5G will be in stages. Firstly in shall be activated for metros and then rest of areas.
In the beginning, operators may possibly charge more for 5G services compared to 4G.
When it comes to the pie, it is speculated that Bharti and Jio could emerge as big players in the 5G space whereas the Vodafone Idea may lag due to its weak financial position.
The 5G spectrum auction has started, and now, has stretched to 4th day. There are speculations regarding how much the government could make out of the same. As of now, Rs 1,49,623 crore worth of bids have been received so far. In best to best scenario, as per the speculations, companies can spend up to Business, 5G, 5G auctionTrak.in