Spectrum auction may not be aggressive

“As Adani is unlikely to bid in the 3.5 GHz spectrum band, there is enough spectrum available to avoid an intense bidding competition,” Credit Suisse analysts said in a note. On the basis of earnest money deposited to DoT.

“We anticipate all winning bids at reserve prices with an overall spectrum outlay of potential 1 trillion,” analysts at Nomura Global Markets Research said in a note issued on July 19. Several strong factors support this prediction, according to notes from clients of brokerage houses.

One, Adani Data Network will skip the consumer 5G spectrum category as it will pick up the airwaves for captive or enterprise use only in certain circles. Adani Data Networks has posted the lowest Earnest Money Deposit (EMD) of 100 crores to participate in the upcoming 5G spectrum auction, indicating that it may buy airwaves for an amount of approx. 650-700 cr, excluding any consumer mobility game.

“Adani’s low EMD means this bidder can only afford 9 billion / US$120m and that spectrum purchase will probably be limited to the lowest priced 26GHz spectrum band. Consequently, Adani has not taken any risk to the telecom companies seeking 5G spectrum in this auction,” said analysts at CLSA Securities.

The group may start with a captive network, as stated, but such limited spectrum may limit its ability to deliver services to other enterprises, said analysts at IIFL, adding that captive services would allow four or five circles. will be limited to

“We see that Adani’s entry into consumer 5G is very unlikely, as both the greenfield rollout and the potential acquisition of Vi will result in significant investment and diminishing returns,” he added. .3 Carrier Vodafone Idea, which has a net debt of 1.9 trillion on its books.

Analysts said the second reason for the auction to be quick is that there is more than enough spectrum available for the three carriers in the 3.5 GHz and 26 GHz bands, which will be used for 5G services. According to DoT, existing telecom companies Reliance Jio, Bharti Airtel and Vodafone Idea have deposited the earnest money. 14,000 crore, 5,500 crore and Brokerage houses said Rs 2,200 crore, respectively, will be mainly used by the three carriers to buy 5G airwaves.

“The highest spectrum price available per player for the 5G band on a pan-India basis will be 489 billion ($6.1 billion). Analysts at Morgan Stanley said in a note seen by Mint, assuming that given the maximum allowed by both Rjio and Bharti Airtel, there would still be enough spectrum left to satisfy the maximum amount that the other two players bid. can.

first article