Reliance Jio becomes the top bidders in India’s $19 billion 5G spectrum auction, winning rights worth $11 billion as the country’s major telco provider plans for the high-speed wireless network.
The Indian government hopes to start rolling out 5G by October this year, which it claims can deliver data speeds around ten times faster than 4G. Globally, the next-generation network is thought to be essential for new technologies like artificial intelligence and self-driving cars.
The country’s telecom minister reported that companies purchased 71% of the total 72 GHz spectrum that was made available in the auction, which ended on Monday and included Jio rivals Bharti Airtel and Vodafone Idea as well as a division of Adani Enterprises Ltd.
Spectrum valued at $5.4 billion and $2.4 billion, respectively, was awarded to Airtel and Vodafone.
“We understand that the spectrum purchased is good enough to cover all the circles in the country,” telecom minister Ashwini Vaishnaw told a press briefing, referring to geographical areas of coverage. India’s 5G coverage will be “very good” over the next three years, he added.
Despite earlier concerns that they may lose approximately 40% of possible revenue as a result of some airwaves going to businesses for private 5G networks, the telecoms made aggressive bids.
Adani, the newest bidder in the auction, bought airwaves for close to $27 million. The company wants to get into the private 5G network market rather than providing consumer services.
The government is allowing auction winners to pay the amounts owed in 20 equal annual installments in order to help the cash-strapped telecom sector.
Since Jio started a price battle in 2016, Airtel and Vodafone have been under pressure, reporting losses in recent years and being pushed by spectrum obligations from prior auctions. However, recent increases in the cost of mobile data have allowed Airtel to slowly start making a profit.
“This spectrum acquisition…has been part of a deliberate strategy to buy the best spectrum assets at a substantially lower relative cost compared to our competition,” Airtel Chief Executive Officer Gopal Vittal said in a statement.
Jio said that it will be ready for a pan-India rollout of 5G “in the shortest period of time,” without giving specifics.