Jio, a subsidiary of Reliance Industries, emerged as the highest bidder in India’s $19 billion (approximately Rs. 1.5 lakh crore) 5G spectrum auction, taking home airwaves valued at $11 billion (about Rs. 87,000 crores) as the country prepares for the high-speed wireless network.
By October of this year, the Indian government hopes to start rolling out 5G, which has been said to offer data rates that are roughly 10 times faster than those of 4G. The next-generation network is viewed as being essential for developing technologies like self-driving automobiles and artificial intelligence on a global scale.
The auction, which ended on Monday and also included participation from Jio rivals Bharti Airtel and Vodafone Idea as well as a unit of Adani Enterprises, saw businesses purchase 71% of the total 72 GHz spectrum offered in it.
The spectrum secured by Airtel and Vodafone is valued at $5.4 billion (or roughly Rs. 43,000 crores) and $2.4 billion (or roughly Rs. 19,000 crores), respectively.
Speaking during a news conference, telecom minister Ashwini Vaishnav said, “We recognize that the spectrum obtained is good enough to reach all the circles in the country. Over the following three years, India’s 5G coverage will be “extremely good,” he continued.
The telecoms eagerly bid despite prior worries that they may lose approximately 40% of possible revenue since some airwaves were given to businesses for private 5G networks.
The newest participant in the auction process, Adani, bought airwaves for over $27 million (nearly Rs. 215 crores). The company intends to enter the market for private 5G networks rather than providing consumer services.
The government is allowing auction winners to make payments in 20 equal annual installments in order to help the cash-strapped telecom industry.
Since Jio started a price battle in 2016, Airtel and Vodafone have been under pressure. Both companies have seen losses recently and are also feeling the pinch from unpaid spectrum obligations from previous auctions. Recent increases in the cost of mobile data, however, have helped Airtel gradually return to profitability.
In a statement, Airtel Chief Executive Officer Gopal Vittal claimed that the spectrum purchase was “part of a strategic strategy to obtain the greatest spectrum assets at a considerably lower relative cost compared to our competition.”
Jio made the unspecific claim that it will be prepared for a 5G deployment over all of India “in the shortest amount of time.”
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