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The 5G auction in India kicks off on Tuesday, and four local companies will be in the race to bid for the country’s first 5G spectrum ahead of its planned rollout in 2023.
The bidders will include all three major mobile operators in India: Reliance Jio, the market leader, Bharti Airtel and Vodafone Idea.
The sudden entry of Indian billionaire Gautam Adani as the fourth contender could still rock the boat.
5G refers to the fifth generation of high-speed mobile internet that promises ultra-fast download speeds that can support technologies such as driverless cars and virtual reality.
A total of 72 GHz of 5G spectrum will be on the block, and the winning bids will retain their rights for 20 years.
In total, the four The bidders put $2.7 billion (INR 218 billion) into earnest money, the mandatory amount required to confirm the contract. The amount of serious money deposited provides an indication of how much spectrum a company is willing to buy.
The auction will see strong bids by Reliance Industries Jio, which has deposited 140 billion rupees of earnest money with the government – the largest sum among the contenders.
Other major mobile operators include Bharti Airtel which has placed Rs 55 billion and Vodafone Idea which has deposited Rs 22 billion of earnest money.
Adani enters the 5G race
The Adani Group, which mainly engages in infrastructure, has put only INR 1 billion as earnest money, allowing it to bid on only a limited amount of spectrum.
Before the identity of the fourth bidder was revealed, there was speculation of a new competitor in the mobile network and data space, which led to high expectations for the bidding.
However, the company moved to quell the speculation. When contacted by CNBC, the Adani Group dismissed plans to enter the mobile business.
“We are participating in the 5G spectrum auction to provide private network solutions as well as enhance cybersecurity in airports, ports, logistics, power generation, transmission and distribution, and various manufacturing operations,” the group said in a statement.
While a little amount of serious money Ruling out Adani’s nationwide entry into the mobile space, it still leaves room for enough spectrum to provide coverage in big cities like Mumbai and New Delhi, which is an important market.
In India, “5G is expected to account for nearly 40 percent of mobile subscriptions – 500 million – by the end of 2027,” according to a recent report by Ericsson, one of the major providers of 5G equipment in the US.
“By then, smartphone users in the region are expected to consume 50GB of data per month on average,” the report said, adding that “there is already a good basis for 5G uptake” in the country.
The report, citing a recent study, said there is a strong consumer interest in adopting 5G. It estimated that about 40 million smartphone users could use 5G in the first year of its availability.