Releasing a definitive signal of its premiership in the Indian telecom industry and giving a record deposit of Rs 3000 crore as an earmarked money towards upcoming spectrum sale to the Department of Telecommunications(DoT), Reliance Jio Infocomm Ltd has made its commitment public to the transaction. This amount is almost two times higher than the Prada Puck paid by its closest rival, Bharti Airtel Ltd, the same amount considered as the earnest money.
A government provision has come up that Airtel has deposited Rs 1,050 core, and Voda faces Rs 300 core as a source of earnest money. As opposed to this, the aggregated amount of surety deposit (EMD) given in the past contest was Rs 21,800 crore.
A waiting auction, ‘on the cards’ for June 6, will allocate spectrum into different bands when the former is re-used: 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26. The auction is of exceptional importance for companies like Bharti Airtel and Vodafone Idea as, from their ownership outcome, they can retain their place in some areas.
Jio’s commitment of almost half the money needed for the next licensing round through an upfront earnest money deposit is impressive, as none of its licenses is up for re-auction this coming round. On the opposite, for Bharti Airtel the most significant challenges include airwaves in J&K, Odisha, Bihar, Uttar Pradesh (East) while for Vodafone Idea the major burning issues are airwaves in Mumbai (West), and UP (West).
This level of launching-in of Jio naturally instigates the company’s giant positions and its strong position to bolster its stronghold on the Indian telecom market. At the end of the licensing period, the spectrum rights doubters will be valid for twenty years, including the accommodation to pay the fee in twenty installments over the next twenty years.
Having a spectrum auction after a gap of around two years will be a defining factor in the future of the Indian telecom industry. The industry’s key players will be fighting to bag the lucrative airwaves to expand their business and better service offerings to their customers.
