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Picture: BLOOMBERG
Picture: BLOOMBERG

Billionaire Mukesh Ambani-led Reliance Jio Infocomm spent more than $11bn, emerging as the top buyer in India’s airwaves auction on Monday as it sought to cement its edge over the rivals.

The South Asian nation sold spectrum, including 5G airwaves, worth 1.5-trillion rupees ($19bn) across multiple bands, India’s telecommunications minister Ashwini Vaishnaw said  in New Delhi on Monday, confirming the government’s forecast of a record collection. Reliance Jio, India’s largest wireless operator, bought 24,740MHz of airwaves for 880.78-billion rupees, he said.

Smaller rivals Bharti Airtel and Vodafone Idea spent 430.8-billion rupees and 188-billion rupees, respectively, as some of the country’s richest tycoons faced off for 5G rights that could decide who dominates the digital era in a country of billion-plus people.

Adani Data Networks, the surprise entrant from Gautam Adani’s conglomerate, bought airwaves across six Indian states for 2.12-billion rupees in its debut auction, allaying fears of a bigger telecom play for now. The firm, controlled by Asia’s richest person, had said it was buying airwaves to build a private 5G network after the initial frenzy around its entry in July.

The latest auction spending by Ambani’s retail-to-refining conglomerate underscores its transformation from being an energy giant to a tech titan — a process that can be accelerated with the help of speedy 5G airwaves. Bharti and Vodafone Idea also need 5G networks to claw back market share from Reliance Jio as well as bolster their profits. 

‘Lion’s share’

“The current auctions have played out much as they would have, with the incumbents divvying up the lion’s share in proportion to their size and scale,” said Utkarsh Sinha, MD at Bexley Advisors, a boutique investment bank in Mumbai.

 While Adani’s entry probably urged the operators to bid “more aggressively”, the ports-to-power group “bid the way they said they would — for private networks.”

Reliance Jio will “rollout the world’s most advanced 5G network across India”, it said in a statement, adding that its “unique 700MHz spectrum footprint will make it the only operator providing true 5G services across India”.

It has started field trials for 5G services and plans to launch nationwide operations soon, parent Reliance Industries said last month.

Bharti followed “a deliberate strategy” to acquire spectrum at a “substantially lower relative cost” compared with its competition, CEO Gopal Vittal said in a statement on Monday. “This will allow us to raise the bar on innovation” and provide the best 5G experience in India, he said.

Vodafone Idea, a joint venture between Vodafone Group and billionaire Kumar Mangalam Birla’s Aditya Birla Group, bought airwaves to strengthen its pan-India 4G services, as well as “embark on its 5G rollout journey”, it said in a statement. The smallest of three private sector operator is also relying on parent Vodafone’s global experience in deploying 5G services.

Mapping ambitions

It also marked the first time the Adani Group and Ambani-led firms were vying for the same asset, making it a keenly watched contest as telecom operators and analysts tried to map the former’s ambitions in the sector. Ambani disrupted India’s telecom sector in 2016 with ultra-cheap services and has dominated it since.

The airwave auction will bolster the Narendra Modi-led government’s finances at a time when it seeks funds to tame inflation and rein in the fiscal deficit. The bidding amount surpassed estimates by rating company ICRA, which said in June that the spectrum sale could raise as much as 1.1-trillion rupees. 

India will get 133.65-billion rupees upfront from the auction, the minister said.

Bloomberg News. More stories like this are available on bloomberg.com

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