Reliance’s $11 Billion Bid Wins Lion’s Share of 5G Spectrum in India Auction

The acquisition by Reliance Jio Infocomm Ltd. of 24,740 megahertz of airwaves across multiple bands represented more than half the $19 billion of commitments received by the government after a week of bidding that ended late Monday. India is seeking to close the gap with other countries—including China and South Korea—that have already installed 5G, which is far faster than the present networks and seen as key to a new era of digitally connected industries.

New Delhi aims to complete the allocation of airwaves by mid-August, with 5G services offered in key cities by September or October, Telecom Minister

Ashwini Vaishnaw

told The Wall Street Journal recently.

Jio said it can now roll out what it said would be the world’s most advanced platform in the shortest period of time, thanks to an already installed nationwide optical-fiber network and platform that is underpinned by the latest technology and free of outdated legacy systems.

The company was targeting services in sectors such as education, healthcare, agriculture, manufacturing and e-governance, which are central to the government’s digital-transformation policies, said

Akash M. Ambani,

who heads Jio and is the son of

Mukesh Ambani,

Reliance Industries Ltd.’s billionaire chairman.

The government had put on sale the right to use 72 gigahertz of airwaves in various frequency bands ranging from 26 gigahertz to 700 megahertz, and had expected to raise around 900 billion Indian rupees, the equivalent of $11.4 billion. In the end, Jio’s 880.78 billion rupee bid alone almost met that target. The 1.5 trillion rupees raised in total will also be a financial boost for Prime Minister

Narendra Modi’s

government, which is battling high inflation and looking to rein in a ballooning fiscal deficit.

Telecom giant

Bharti Airtel Ltd.

made the second-highest bid at 430.8 billion rupees, followed by the 188 billion rupee offer of

Vodafone Idea Ltd.

, a joint venture between the U.K.-based telecom group and Aditya Birla Group. Adani Data Networks Ltd. of the

Adani Group

bid for a small slice of the airwaves that it intends to use as private networks for its ports, airports, logistics, transmission and manufacturing operations.

Appetite at the auction was boosted after the government allowed companies to pay in 20 equal installments, having earlier eased the debt burden of telecom companies related to their use of other airwaves and license fees.

Bidding was also lifted by the government’s decision to slash the base price for the costliest 700 megahertz band by as much as 40%, after it remained unsold in previous 4G auctions in 2016 and 2021. Jio was the only bidder for the band, which offers a wider range and greater ability to penetrate buildings, and so requires fewer towers and other infrastructure to provide coverage, especially in rural areas.

Equipment manufacturers from China—the world’s No.1 wireless market—are unlikely to win contracts for the rollout. Expectations about 5G’s capabilities for more connected devices, from cars to medical devices, have fueled security concerns globally, particularly about Chinese telecom-equipment firms.

While India said in 2019 it had received proposals from Huawei Technologies Co. and

ZTE Corp.

to take part in early trials with Indian telecom-service providers, authorities have informally asked operators not to pair up with the firms. Tensions between India and China deteriorated after a deadly border clash in June 2020 that left 20 Indian soldiers and four Chinese troops dead.

Write to Rajesh Roy at [email protected]