Gautam Adani is not taking on Mukesh Ambani in telecom

The battle lines for the upcoming fifth-generation (5G) mobile spectrum auction have become clearer with the details of the earnest money deposited by four bidding companies trickling out today.

For starters, we now have confirmation that the 5G auction will be a Reliance Jio versus Bharti Airtel battle, if not a full-fledged war. This is because Reliance Jio has deposited a sum of Rs 14,000 crore as the earnest money deposit for the upcoming auction. This places the company far ahead of the competition and allows it bid aggressively.

To get a sense of the gap that Jio has put between itself and its competition – take a look at the numbers. The Jio earnest money deposit is 140 times the Rs 100 crore deposit by Adani Data Networks, over 2.5 times that of Bharti Airtel (Rs 5,500 crore), and over 6.3 times of Vodafone Idea (Rs 2,200 crore).

Based on the earnest money deposit, some analysts expect that Reliance Jio is now eligible to put in bids of up to Rs 1,27,000 crore and Bharti Airtel up to Rs 48,000 crore. While the amount of the earnest money deposit is an indication of the bidding quantum and capacity, analysts also point out the scenario may vary during the actual bids.

The numbers also seal the recent debate and confirm that Gautam Adani has no immediate plans to take on Mukesh Ambani and his massive Jio consumer mobile services empire.

Instead, while he will bid for spectrum, the radio frequencies that Adani hopes to acquire are not for consumer mobility, but for a capital-efficient private network to connect his sprawling business operations across India and fuel his data centre foray.  

 “A deposit of this amount can be looked at as the company preparing for various scenarios vis-à-vis competition. However, it may not be correct to conclude that actual bid numbers will be in this range”, an analyst said.

“Adani Data will bid for the 26 gigahertz (GHz) frequency band, which is a 5G band but can be used well for private networks. Instead of waiting for direct spectrum assignment of spectrum by the government or leasing it from operators, Adani is acquiring spectrum directly via auction. This will give it a lot of flexibility as it may have to fork out only Rs 700 crore for this particular spectrum”, the analyst added.

The 5G auction is slated to begin on July 26. A total of 72 GHz of spectrum, valued at around Rs 4.3 lakh crore is being put on the block.

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Also Read: 5G Auction: Reliance Jio signals massive intent with earnest money deposit of Rs 14,000 cr