Geo, Airtel in position to buy Pan-India spectrum, uncertainty over VIL bid:

Reliance Jio and Bharti Airtel are in a position to buy Pan-India 5G spectrum, but there is uncertainty surrounding bids for Vodafone Idea for radiowaves, according to a BOFA Securities report released on Monday.

The report noted that it would be difficult for any telecom company that has not bid for 5G spectrum in a certain circle to roll out 5G in existing 4G bands because existing networks are running at a capacity and therefore have limited free spectrum that can be engraved.

“Higher reserve prices may discourage any new telco from bidding at auction and only telcos with strong balance sheets like RIL, Bharti are in a position to buy Pan India 5G spectrum. It remains unclear how VIL will fund its 5G bids, “the report said.

BofA’s research analysts were of the opinion that Vodafone Idea (VIL) management has focused on the top core circles and the company can selectively bid on their core 3G and 4G circles.

“After 5G, we believe that VIL’s Pan India will be even weaker without 5G spectrum,” the report said.

An email question sent to VIL in the report did not immediately respond.

The BofA report estimates that operators may be interested in the auction at 3.5 GHz because it is the primary band for 5G, while the premium may receive limited interest due to the high price of 700 MHz and its promotional features like 800 and 900. MHz band.

“Even if the government decides to hold an auction this time, the next auction could have interest on 26 GHz,” the report said.

The government expects the next round of spectrum auctions to be held in late June or early July. 5G services are expected to make their way across the country between August-September.

The telecom department is likely to send a proposal for the 5G spectrum auction to the Union Cabinet this week for final approval.

The Telecom Regulatory Authority of India (TRAI) has recommended a mega auction scheme worth over Rs 7.5 lakh crore for 1 lakh MHz spectrum if the government allocates it for 30 years.

In 20 years, the total value of the proposed spectrum auction will stand at a reserve price of around Rs 5.07 trillion, according to the back-of-the-envelope calculation.

With a lot of spectrum unsold in the last two auctions, TRAI has recommended selling airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, MHz, 2500 MHz and 250 MHz. 3300-3670 MHz and 24.25-28.5 Ghz.

Meanwhile, BofA Securities expects the Jio 5G to be particularly aggressive in deploying standalone 5G, which will force other telecom players to invest in front-load capex as well.

“The semiconductor supply-chain problem and the relatively high price point could be a major challenge on the device ecosystem front,” the report said.

BofA Securities said the government could also consider allocating or auctioning E and V bands for backholes, which would help reduce reliance on fiber backhole connections, especially in Tier 2 and 3 cities.

“The timing is not unknown but the government is keen to allocate the band as soon as possible,” the report said.

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