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10 Things to Know About the 5G Spectrum Auctions

Aug 3, 2022

Today, I was in a Zoom meeting when my boss asked me, "Are you ready with your presentation? Share your screen so that we can see your progress so far."

I wiped the sweat beads on my forehead, smiled, and said "Yes, it's ready! I will just share in a moment", and then my screen froze. All they could see was a static me, no audio, no video, and of course no presentation.

Soon, the meeting ended. In a few minutes, my boss texted me, "The meeting was disconnected. Your screen was stuck again." I breathed a sigh of relief and replied to him, "Sorry must be the network issues. Hopefully, I will be able to present tomorrow."

In reply, my boss sent me a snapshot of a newspaper headline that read, "5G services will probably start from October".

Below that, he wrote, "I guess you will have to come up with new excuses post-October."

With the end of India's biggest 5G spectrum auction, looks like we Indians are close to saying goodbye to no network, and poor connection excuses.

However, besides the probable 5G launch fate, a lot of other things also happened in the 7-day-long 5G spectrum auction. All the best 5G stocks are in the focus after the auction.

We've put all the important things that happened in 10 quick points. Here is a quick summary of the 5G spectrum auction.

10 Things to Know About the 5G Spectrum Auctions

  • The auction began on 26 July and went on for seven days. Telecom Minister, Ashwini Vaishnaw addressed the media when the auction ended on 1 August 2022. He said,

    Spectrum purchased is good enough to cover all circles in the country. Coming 2-3 years, we will have good 5G coverage.
  • The auction recorded a huge bid of Rs 1.5 tn. The government will receive the payments for the spectrums in instalments. In the first year, the government will receive Rs 133.7 bn.
  • Out of the 72,098 MHz offered in the auction, 51,236 MHz (71%) was sold. The airwaves will be allocated on 10 August, and services are expected to roll out in October 2022.
  • The bids received from the auction of the 5G spectrum are almost double the bids received for the 4G spectrum sold last year. Total bids for the 4G spectrum amounted to Rs 778.2 bn.

    The 5G bid spectrum bids are almost triple of the 3G spectrum auction held in 2010.
  • Mukesh Ambani's Reliance Jio was the biggest bidder. It acquired almost half of the airwaves sold. Jio made a total bid of Rs 880.8 bn.

    It acquired 24,740 Megahertz (MHz) of airwaves in five bands. It acquired spectrum in 700 MHz, 800 MHz, 1,800 MHz, 3,300 Hz, and 26 GHz.
  • The closest competitor of Jio, Airtel, was second in the race. Bharti Airtel made a total bid of Rs 430.8 bn for 19,867.8 MHz of airwaves.

    It acquired a spectrum of 900 MHz, 1,800 MHz, 2,100 MHz, 3,300 MHz, and 26 GHz.
  • The debt-laden Vodafone Idea made a total bid of Rs 188 bn for 6,228 MHz of airwaves. It acquired a spectrum of 3,300 MHz and 26 GHz.
  • Adani's bid in the spectrum was quite low. Adani made a total bid of Rs 2.1 bn, which is less than 1% of the total spectrum bids. Adani acquired spectrum in 26 MHz of airwaves.

    This spectrum is not useful for telephone services; it can be used for setting up a private network for an end to end communication.
  • All the bands were sold at base price, except for the 1,800 MHz band. Jio and Airtel were in fierce competition for acquiring the band, which pushed the prices higher.
  • The government had put on an offer spectrum in 10 bands. 600 MHz airwaves spectrum was bought in for the first time but no bids were received for the same.

Investment Takeaway...

All the top stocks riding the 5G wave in India have jumped into the 5G spectrum auction.

It looks like Reliance Jio will dominate the Indian telecom sector for years to come because of its sheer size.

Adani did not make a bid for the telephone spectrum. Hence all the rumours around Adani coming up with its own telecom services are put to an end.

Airtel has managed to snag a fair share of airwaves. It looks like Airtel will dive with its head-first in the 5G spectrum.

Vodafone Idea was able to keep its head above the water. It acquired a low share of airwaves but well something is better than nothing.

The telecom sector stocks stands under the roof of major changes.

Starting with the 5G spectrum to the hidden trend that could boost telecom sectors in the years to come, the telecom sector is up for a roller coaster ride.

The 5G spectrum auction has given promising news for all the players in the telecom sector. But remember, it is not about the opportunity, it is about how well the company uses the opportunity.

Hence, before making any investment, an investor should carefully analyse whether all these companies can actually offer what they promise.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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