India 5G auction ends with bids falling well short of reserve

The Economic Times reports that bidding ended after just seven rounds, with the total weighing in at INR113 billion ($1.35 billion), a fraction of the INR960 billion ($11.49 billion) reserve price.

According to the outlet's various sources, just 140 MHz-150 MHz of the 10.5 GHz of available spectrum is believed to have been sold.

The ET, citing a research note from equity analyst Motilal Oswal, said Bharti Airtel is expected to emerge as the biggest bidder, splashing an estimated INR54 billion to bulk up in some service areas – or circles as they are called in India – and renew licences in others.

More specifically, it is expected to have picked up 41.4 MHz of 900-MHz; 10.2 MHz of 1800-MHz; and 20 MHz of 2100-MHz.

Market leader Reliance Jio's participation was decidedly limited by comparison.

According to the report, Jio is likely to have spent a modest INR19 billion to add to its portfolio another 26.6 MHz of 1800-MHz spectrum, split between six circles.

That's less than the estimated INR23 billion spent by third-placed – and financially strained – Vodafone Idea (Vi), which is understood to have picked up 14 MHz of 900-MHz; 4.4 MHz of 1800-MHz; and 10 MHz of 2500-MHz.

The lacklustre showing is unsurprising – Telecoms.com reported earlier this week that as things stand, there is little demand for additional 5G spectrum among India's MNOs.

Nonetheless, the total figure raised is a far cry from the $19 billion generated by India's last 5G auction, which concluded in August 2022. Back then, there were concerns that onerous licence obligations might temper interest, but they ultimately proved unfounded – Jio alone splashed $11 billion on frequencies.

The notion that India's MNOs are sufficiently furnished with 5G spectrum is out of tune with the popular industry refrain that as much spectrum as possible is needed to unlock 5G and (one day) 6G's potential. It's also indicative of 5G's perception problem – at the moment it doesn't offer anything revolutionary, so why get carried away with spending money on extra spectrum before the current supply has been exhausted?

The government's inability to shift this latest batch of airwaves isn't expected to put the brakes on 5G in India any time soon either.

According to Ericsson's latest Mobility Report, 5G connections in India reached 119 million at the end of 2023. By 2029 they are expected to hit 840 million, accounting for 65% of mobile subscriptions in a region comprised of India, Nepal and Bhutan. In line with most parts of the world, enhanced mobile broadband (eMBB) and fixed-wireless access (FWA) have emerged as the most popular early 5G use cases.

In the meantime, it will be interesting to see how the government might repackage the unsold frequencies to maximise their value.