Yesterday we finished day 1 of the 5G auctions. Total 4 rounds were completed and the total spectrum bid and sold was 50.53 GHz at an aggregated price of Rs 1,45,263 Cr (18.15 Billion USD). Total EMD Consumed was 75% of the total submitted, i.e Rs 16,428 Cr of Rs 21,800 Cr. The total points consumed was 138976 of the total 257180 allocated, i.e 54% of the total. Now assume that the “Activity Factor” is 90% then the bidder can stretch to 154417, which means 102763 points are lost (40% of the total allocated).
Hence, points in the play on day 2 will be just 15441, which is just 6% of the total points allocated.
Operator Wise
Though it is difficult to predict how the auction is proceeding on an operator basis, some educated guess is possible. These are based on specific bands of interest the operators have, based on their EMD submitted and their ability to leverage their existing spectrum in various bands.
A) RJIO
RJIO had submitted the maximum EMD as therefore they are most likely to take the 700 MHz (10 MHz Pan India). RJIO also has an interest in the 800 MHz, and no interest in the 900 & 2100 MHz band. RJIO also has an interest in 1800, 3500 & 26000 MHz bands. Therefore, RJIO might bid 100 MHz of 3.5 GHz, and 800 MHz of 26 GHz band.
B) Bharti
Bharti’s EMD is not sufficient enough to allow it to bid 700 MHz. It is also extremely unlikely that it will bid 800 MHz. It might bid a few circles in 900 MHz, and 2100 MHz. For the 3500 MHz & 26 GHz bands, I assume that it will bid 100 MHz, and 800 MHz respectively. It might also bid 2300 MHz today will the remaining points and EMD left in its kitty.
C) VI
VI doesn’t have EMD to bid 700 MHz. It has no interest in 800, and 2300 MHz bands. However, it will have interest in 900, 1800 & 2100 MHz bands. Now for 5G bands of 3.5 & 26 GHz, I have assumed it is bidding 50 MHz in 3.5 GHz and something between 400 to 500 MHz in 26 GHz.
D) Adani
Adani has very little EMD. Hence very difficult to predict what it is bidding in the 26 GHz band. It doesn’t have enough EMD to bid on other bands. Most likely it is bidding between 200 to 400 MHz in a few selected circles.
Based on the above assumption the following picture emerges on the spectrum taken, EMD, and Points consumed after the end of Day1.
Circle Wise Summary
The circle-wise summary aggregated across all operators is as under.
The total spectrum taken is 50.583 GHz at a value of Rs 1.45 Lakh Cr.
Operator Wise Outflow
The following chart provides operators wise outflow at the end of the day1.
Will we see additional bidding today?
Yes, as the operators have consumed in total just 75% of the total EMD submitted. RJIO is left with approximately Rs 4900+ Cr, Bharti is left with Rs 500+ Cr, and VI might be left with very little, and the same might be true for Adani. But, the operators will not be able to consume all their EMDs as they have lost a significant number of points, and in total just left with 6% if we assume the activity factor as 90%. Hence, only a few bands/circles will see additional bidding. Like 2300 MHz band. It will be most likely taken by Bharti. As to taking 60 MHz of 2300, Bharti will need 4500 points, and it has just enough points and EMD to take this band. RJIO will have 8650 points and might take spectrum in a few more circles/bands. But in any case, the overall tally may not go beyond 1.6 Lakh Cr, and the auction will most likely end today.
(Views expressed are of my own and do not reflect that of my employer)
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