India’s telecom operators have left market pundits baffled with their aggressive approach to the 5G spectrum. The government of India, on Monday, disclosed that total bids worth a whopping $19 billion for the 5G spectrum were made by the telecom operators in India. This was the highest amount from them in any spectrum auction. So, who is the ultimate winner and loser of 5G auction in India? Let’s find out!
5G Auction in India: Jio Emerged As Top Bidder
India, which is the second-largest wireless market in the world, is preparing to roll out faster voice and data speeds. For seven days, Reliance Jio Infocomm, Bharti Airtel, and Vodafone left no stone unturned to gain an edge over others and finally emerged as the top competitors by acquiring 71% of the total spectrum that was made available by the government. This exceeded government expectations as well.
In a press conference, Ashwini Vaishnaw, Telecom Minister, stated Monday that Tycoon Mukesh Ambani-led Reliance Jio, which is backed by Meta and Google, was the most aggressive participant, with bids worth $11.13 billion. Google-backed Airtel bid $5.44 billion while Vodafone Idea, India’s unit of British multinational Vodafone Group, and billionaire Kumar Mangalam’s Idea Cellular, bid $2.37 billion.
But it was the bid of India’s richest man Gautam Adani who remained the center of attraction for everyone. It was the first time when Adani’s firm was participating in the spectrum allocation bid. However, its interest was limited to $26.8 million only. Last month, the company stated that it would participate in India’s 5G auction to provide private networks with enhanced cyber security in “the air, ports, logistics, power generation and transmission, as well as various manufacturing operations.”
India is the second-largest wireless market after the United States. However, India has taken more than expected time to set up networks for 5G technology as compared with many other countries. This technology, which all carriers claim to offer much faster data speeds, could be a growth driver in the development of applications in autonomous mobility, telemedicine, and robotics, among other industries.
Analysts believe that the excitement towards faster speeds will help telecom operators who have suffered from declining revenues over recent years to persuade customers to pay more for data.
Jio’s aggressive bids are a sign of its digital ambitions. Reliance, which started its telecom operations in India five years ago has become the country’s largest wireless carrier with more than 420 million subscribers. Jio redefined the equations of the market by offering jaw-dropping data rates, which helped the company acquire millions of users in record time. However, this triggered cut-throat competition among the telecom operators and pushed the industry into lower tariffs. The exploded adoption of fast mobile internet helped many startups to flourish and penetrate the market with various services and offerings.
The rollout of the 5G network in India is expected to kick off in October this year. The operators are quite optimistic about receiving a warm response from residents of metro cities as they will have the opportunity to enjoy faster internet speeds by the end of this year. Mr. Vaishnaw said that India had won the auction for 5G radiowaves and that the government was working hard to finish the allocation by August 10.
It’s been over two years since the smartphone manufacturers have been offering 5G-supported devices in India, anticipating the rollout. According to Counterpoint research, over 50 million 5G compatible smartphones have already been shipped in the South Asia market. A fifth of these phones arrived in the June quarter alone. India is the second-largest smartphone market in the world after China. In terms of mobile internet users, it also trails only behind China. With the rollout of the 5G network in India, the government is expecting to unleash an array of services, such as connected cars, etc, that can’t function smoothly on the 4G network.
“This spectrum acquisition at the latest auction has been a part of a deliberate strategy to buy the best spectrum assets at a substantially lower relative cost compared to our competition. This will allow us to raise the bar on innovation and address the emerging needs of every discerning customer who demands the best experience in India,” said Gopal Vittal, chief executive of Bharti Airtel, in a statement.
Excited by the unprecedented response to the 5G spectrum allocation, the government is planning to shift gears and relax the norms for the next-generation product/services that can only run on the faster internet infrastructure. Interestingly, Jio’s aggressive $11 billion bid in India’s 5G auction clearly tells who would be at forefront of these offerings!