India’s 5G auction kicks off today. These are the companies in the race
The number of 5G subscribers in India is expected to grow to 500 million by 2027, according to a report. Mobile phones in the vast country have become almost indispensable even among rural Indians, with a farmer here seen taking a selfie during a protest in stock photo from 2019.
Vishal Bhatnagar | Afp | Getty Images
India’s 5G auction kicks off on Tuesday and four local companies will be in the race to bid for the country’s first 5G spectrum ahead of a planned rollout in 2023.
Bidders will include all the three major mobile operators in India: Reliance Jio, the market leader, Bharti Airtel and Vodafone Idea.
The surprise 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 which promises super-fast download speeds that can support technologies like driverless cars and virtual reality.
A total of 72 gigahertz of 5G spectrum will be on the block, for which winning bids will retain the rights for 20 years.
In total, the four bidders have put up $2.7 billion (218 billion Indian rupees) in earnest money, the mandatory sum required to confirm a contract. The amount of earnest money deposited provides an indication of the amount of spectrum a company wishes to buy.
Other major mobile operators include Bharti Airtel which put 55 billion rupees and Vodafone Idea which deposited 22 billion rupees of earnest money.
The Adani Group conglomerate, which operates mainly in infrastructure, put in only 1 billion Indian rupees as earnest money, which entitles it to bid for only a limited amount of spectrum.
Before the fourth bidder’s identity was disclosed, there was speculation of a new competitor in the mobile network and data space, which drove up expectations of higher bidding.
However, the company moved to douse the speculation. When contacted by CNBC, the Adani Group denied plans to enter the mobile phone space.
“We are participating in the 5G spectrum auction to provide private network solutions along with enhanced cyber security in the airport, ports & logistics, power generation, transmission, distribution, and various manufacturing operations,” the group said in a statement.
While the small amount of earnest money rules out a nationwide entry into the mobile space by Adani, it still leaves room to acquire enough spectrum to provide coverage in large cities such as Mumbai and New Delhi, a significant market.
In India, “5G is projected to account for almost 40 percent of mobile subscriptions – 500 million – by the end of 2027,” according to a recent report by Ericsson, one of the leading providers of 5G equipment in the U.S.
“By then, smartphone users in the region are forecast to consume 50GB of data per month on average,” the report said, adding that “there is already a good foundation for 5G uptake” in the country.
There is significant consumer interest in adopting 5G, the report said citing a recent study. It estimated that about 40 million smartphone users could take up 5G in the initial year of its availability.