What Made Reliance Jio Fight Fiercely For The 700 MHz Band In The 5G Auctions? 

India’s mega 5G spectrum auction recently ended after seven days and 40 rounds, garnering more than Rs 1.5 lakh crore. It saw the active participation of players like Bharti Airtel and Vodafone Idea with market leader Reliance Jio leading the bidding after pumping in a total of Rs 88,078 crore. 

On offer were 10 spectrum bands across frequencies—from low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz) and mid (3,300 MHz) to high (26 GHz) frequency bands. 

While there were no bids for airwaves in the 600 MHz, 800 MHz, and 2300 MHz bands, there was one band that attracted attention the most with Jio being particularly interested in winning it. 

The band in question, the 700 MHz, saw around 40% of it being sold with provisional bids worth Rs 39,270 crore being received from Jio, several publications stated, quoting government sources.  

Behind The 700 MHz Band

The 700 MHz band, which is usually sold at a higher price, is said to provide better network coverage due to low frequency and has the ability to penetrate buildings efficiently. That lets telcos offer better, stable and faster connectivity in dense urban areas such as Delhi, Mumbai, Kolkata, etc. 

For telcos, even at its high price, it costs less to provide broadband services in the 700 MHz band as compared to, say, the 2,100 MHz band.

A sub-GHz band—bands below 1000 MHz—offers better coverage with speed without consuming much power. In contrast, the highest band, the 26 GHz frequency band, which can offer higher speeds of over 1 gigabits per second, may not cover a larger area and its coverage can even be disrupted by trees and buildings. Therefore, a sub-GHz band, like the 700 MHz band, is said to be more profitable for a company than a GHz band.

Despite its advantages, it remained unsold in the two previous telecom spectrum auctions—2016 and 2021—due to the high reserve price. In 2016, it was priced at Rs 11,485 per MHz, twice the base price of the 1,800 MHz band. 

In the price-sensitive Indian market, telcos are already struggling amid cut-throat competition while battling to settle burgeoning adjusted gross revenue-related dues. The low average revenue per user (ARPU) in the country has led to leading telecom players like Jio, Airtel, and Vodafone Idea increasing the price of their voice and data plans. Telcos may also have to keep the cost of 5G plans low so that more people buy the plans. For that, they might have to optimise and keep the spectrum prices in check.

Jio’s Playground

Currently, only Jio has the 700 MHz band for its 5G connectivity, placing it ahead of all the other players looking to offer 5G in the sub-GHz band. It will help Jio offer 5G services even in rural areas at a cheaper rate, giving it a comprehensive spectrum portfolio.

Airtel, India’s second largest telco, was conspicuously missing from the list of telcos bidding for the band. Senior Airtel officials have said that the company will not be bidding for the 700 MHz band in the future auction either as its current spectrum holdings, along with the new airwaves that it bought in the just-concluded auction, are together enough to offer quality 5G services. This was also the reason why it did not bid for spectrum in the 700 MHz bands in the recent auction, the officials added.

Besides the 700 MHz band, Jio also went for the 800 MHz, 1,800 MHz, 3,300 MHz and 26 GHz bands, shelling out a total of Rs 88,078 crore.

As per reports, 5G services may be available to the general public by September or October and the government is targeting to allocate spectrum by August 15