With Reliance Jio having intensively acquired spectrum in the 2022 auctions, and Vodafone Idea beset with funding issues, Bharti Airtel may lead at the upcoming spectrum auctions in May, analysts say.

Given that Bharti Airtel has to renew the licenses for at least 42MHz of spectrum in the 1800MHz and 900MHz bands across six circles, the telco would be spending Rs 3,800 crore at the reserve prices notified by the government, analyst notes released by Jefferies and Axis Capital, and reviewed by Business Standard, said.

Through a notice released last week, the Department of Telecommunications (DoT) announced that telecom players will have until 22 April to submit bids for the auctions, which will feature all the available spectrum in 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300MHz, and 26GHz bands.

The auction for 5G airwaves in 2022 had seen high bidding intensity, as telcos acquired spectrum for 5G. As a result, 88 percent of Bharti and VIL’s cumulative winning bids were focused on the 3,300MHz and 26GHz spectrum bands, the note by Axis Capital pointed out.

However, analysts estimate a much lower intensity this time around, “We estimate Rs 3,800 crore and Rs 2,500 crore for Bharti and Vodafone Idea (VIL). Jio is unlikely to bid, in our view,” Axis Capital said.

Another reason for the low bid intensity may be that Airtel and Jio’s 5G penetration currently stands at 20 percent of their subscriber bases and network utilization remains relatively low, it added.

Lower End Spectrum

A note by Kotak Institutional Equities said the telco could boost sub-GHz spectrum in existing 800-900MHz bands in select circles.

“Bharti could bid for sub-GHz spectrum in Madhya Pradesh, Maharashtra (to complete 10MHz in 800 bands) and in Andhra Pradesh, Gujarat, Karnataka, Rajasthan, Tamil Nadu, Kerala, and West Bengal (to reach 5-10MHz in the 900 band). The overall outlay for sub-GHz top-up could be an additional Rs 5,000 crore (Rs 490 crore annually for 20 years) if Bharti were to go aggressive in the auction, based on reserve prices,” it said.

The DoT has not put up spectrum in the key 600MHz and 700MHz bands, which were earlier being eyed by Airtel.

The pricey but super-efficient 700MHz band does not feature in the upcoming auction owing to supply being exhausted. Witnessing bidding for the first time in 2022, large chunks of spectrum in the band were picked up by Reliance Jio at an estimated Rs 39,270 crore.

Jio had also acquired 3,300MHz and 26GHz spectrum bands, for its plans to launch 5G on standalone architecture (SA) mode.

“We have assumed that Bharti Airtel will be bidding to renew its 900MHz and 1,800MHz bands, which were set to expire in February 2024, in six circles – UP (East), West Bengal, Bihar, Odisha, Assam, J&K – and were administratively allocated for three months until the auctions start,” Morgan Stanley said in a note.

The telco is set to have a projected incremental spectrum liability of Rs 5,100 crore in FY2025 for Bharti Airtel, it added.

First Published: Mar 11 2024 | 7:45 PM IST

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