India auctioned airwaves worth US$19 billion ($26.2 billion), where billionaire Mukesh Ambani-led Reliance Jio Infocomm Ltd. emerged the top buyer spending more than US$11 billion in a bid to cement its edge over rivals.
The South Asian nation sold spectrum, including 5G airwaves, worth 1.5 trillion rupees (US$19 billion) across multiple bands, India’s telecom minister Ashwini Vaishnaw told reporters in New Delhi on Monday, confirming the government’s forecast of a record collection.
Reliance Jio, India’s largest wireless operator, bought 24,740 megahertz of airwaves for 880.78 billion rupees, the minister said.
Smaller rivals Bharti Airtel Ltd. and Vodafone Idea Ltd. 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.
Gautam Adani’s Adani Data Networks Ltd., the surprise entrant that had said it was buying airwaves only to build a private 5G network after the initial frenzy around its entry, will spend 2.12 billion rupees in its debut auction, allaying fears of a bigger telecom play at least for now.
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.
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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 Ltd., which said in June that the spectrum sale could raise as much as 1.1 trillion rupees.
India government managed to sell 51,236 megahertz of telecom airwaves, or 71% of the 72,098 megahertz that was put on the block by the end of the seventh day in an auction that started July 26. India offered airwaves for a 20-year tenure in frequency bands ranging from 600 megahertz to 26 gigahertz and has eased payment terms.
The companies can make full or part upfront payment for the total bid amount within 10 days of auction completion leading to lesser financial outgo. The buyer will also have an option to avail a moratorium, offered by the government, for the corresponding number of years of payment. The second option is to make payment in 20 equal annual installments.
