India raises US$1.3 billion from tepid wireless airwaves auction
A total of 10,523.1 MHz airwaves in eight bands were put on the block by the Narendra Modi administration
INDIA sold airwaves worth US$1.3 billion in an auction – a fraction of what it earned in the past – as the country’s three remaining private sector operators rein in capital spending in a whittled-down sector.
The spectrum auction, concluded on Wednesday (Jun 26), received more than US$1.3 billion in bids and sold 141 megahertz of spectrum, an official told reporters in New Delhi, asking not to be identified as the results aren’t public. A total of 10,523.1 MHz airwaves in eight bands were put on the block by the Narendra Modi administration.
The country’s second-largest operator, Bharti Airtel, emerged as the top bidder, buying 97 MHz of airwaves for US$820 million, the billionaire Sunil Mittal-controlled company said in an exchange filing. Billionaire Mukesh Ambani-led sector leader Reliance Jio Infocomm and unprofitable Vodafone Idea – fresh from its US $2.2 billion share sale – were the other bidders. Details are awaited on how much spectrum these firms bought.
The tepid airwaves auction this year is a far cry from the hectic bidding of previous auctions which bolstered the government exchequer. 2021’s auction brought in US$11 billion, while the one in 2022 raked in a record US$19 billion, with Reliance Jio being the top buyer in both years. Gautam Adani’s conglomerate, which was a surprise entrant in 2022 auctions, didn’t participate this year.
Demand was likely to be limited in the latest round of auctions as operators secure airwaves mostly to make up for spectrum licences that are expiring soon, Jefferies analyst Akshat Agarwal wrote in March. With 5G rollouts by Reliance Jio and Bharti mostly done, demand for 5G-related frequency brands could be low, Morgan Stanley’s sector analyst Gaurav Rateria wrote then.
Reliance Jio, which leads the market with over 481.8 million subscribers, entered the market in 2016 with free calls and ultra-cheap data. This unleashed a brutal price war forcing most rivals to quit, merge or go bankrupt. It shrank the sector from a dozen players to an oligopolistic structure with just three players now.
India is one of the largest markets for digital services and e-commerce, with over 895.8 million Internet subscribers and more than 1.18 billion telephone users, according to the Department of Telecommunications. BLOOMBERG
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