Business India

India’s largest auction for 5G airwaves fetches government $19 billion

India’s largest auction for 5G airwaves has ended after seven days, potentially setting the stage for a battle of supremacy over India’s digital future between two of Asia’s richest men – Gautam Adani and Mukesh Ambani.

A total of 72 gigahertz of spectrum was on the block in the auction. Ashwini Vaishnaw, India’s telecoms minister, said 71% of what was on offer was sold.

The government drew bids worth approximately $19 billion from the three current players Mr Ambani’s Reliance-Jio, Vodafone Idea and Bharti Airtel – and from a fourth, new entrant, Adani Data Networks.

This surpassed expectations as total bids had more than doubled since the last auction in March 2021, according to CRISIL Research.

While R-Jio emerged as the largest bidder, buying spectrum worth $11 billion, the Adani group spent only about $26 million. The remaining bids came from Bharti Airtel and Vodafone Idea.

While Bharti Airtel and R-Jio reportedly bid for pan-India airwaves, cash-strapped Vodafone Idea spent only in priority sectors.

“Jio is fully ready for 5G rollout in the shortest period of time because of its nationwide fibre presence… and strong global partnerships across the technology ecosystem,” R-Jio said in a statement.

The Adani Group bid on private spectrum that would be accessible in specific areas such as ports or airports, a sector in which the company has already heavily invested.

Mr Adani is a surprise bidder, he controls a sprawling business that spans ports, airports and power, and recently displaced Bill Gates to become the world’s fourth-richest person, with a net worth more than $112 billion.

The introduction of 5G in India is likely to usher in a new era of high-speed internet, allowing video downloads in seconds and enabling the use of advanced connected devices through cloud computing technologies.

With higher speeds on offer, Indian telecom companies are expected to benefit from charging higher prices for 5G they have so far refrained from charging more for 4G plans as compared to 2G or 3G plans.

5G tariff plans will likely lead to higher revenues for telecom companies, according to a note from Nomura.

But India will take to 5G slowly, especially given the likelihood of higher prices and the fact that only about 7% of India’s overall smartphone base is 5G-enabled.