Reliance Jio buys spectrum worth Rs 973.63 crore in Bihar, West Bengal

Reliance Jio expanded its radio waves holding for mobile services by acquiring additional frequencies worth Rs 973.63 crore in the latest spectrum auction that concluded on Wednesday.

The company acquired 5 megahertz paired spectrum in 1,800 Mhz band in Bihar for Rs 420.25 crore and 9.4 Mhz in West Bengal for Rs 553.38 crore.

“Jio acquired additional spectrum in the 1,800 MHz band in Bihar and West Bengal. With this acquisition, Jio has expanded its 1,800 MHz band spectrum in two circles. Jio’s spectrum footprint has increased to 26,801 MHz (uplink + downlink), solidifying its leadership position,” the company said in a statement.

The government had offered a total of 10 GHz of spectrum ranging between 800 MHz to 26 GHz, which was worth Rs 96,238 crore at the base or auction start price.

All the available spectrum in 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands were put to auction. This year auction has seen activity in 900 MHz, 1,800 MHz, 2,100 MHz and 2,500 MHz bands.

“Jio is the only operator in India to have access in low-band, mid-band and high-band (700 MHz, 3300 MHz and 26GHz) spectrum which gives it the unique advantage to provide a superlative experience to customers on 5G,” the company said.

Spectrum in high frequency band is considered suitable for high-speed service and lower band frequency helps in wider network coverage.

“We have already demonstrated our commitment to the Digital India vision by rolling out one of the world’s fastest and widest stand-alone 5G networks within 12 months of allotment of spectrum. This new spectrum acquisition will continue to enable us serving aspirations of the new India, in terms of growing traffic demands and superior customer experience, which is no longer limited to only urban markets,” Reliance Jio Infocomm Chairman Akash Ambani said.

DoT (Department of Telecommunications) sources said that the spectrum will be allotted at the earliest.

Ankit Jain, Vice President and Sector Head – Corporate Ratings, ICRA Ltd, said spectrum realisation translates into annual payout of around Rs 1,100 crore for a period of 20 years at 8.65 per cent rate of interest for the telcos.

“The participation in this spectrum auction was largely driven by the renewals of the expiring spectrum in the 900 MHz and 1,800 MHz bands; coupled with some purchases in the 2,100 MHz and 2,500 MHz bands to strengthen the network,” Jain said.

Overall, in all the spectrum auctions concluded till date, the industry has purchased spectrum worth more than Rs 5.6 lakh crore, which has resulted in a deferred liability of around Rs 4 lakh crore on the books of telcos as on March 31, 2024 (including AGR related liabilities).

Crunching the numbers and estimating the financial impact, Jain said at these muted participation levels, no material adverse impact on the balance sheet of the industry is expected.

The debt levels which stood at Rs 6.4 lakh crore as on March 31, 2024 are expected to moderate to around Rs 6.2-6.3 lakh crore as on March 31, 2025, despite the addition of the deferred liabilities, given the expected improvement in profit generation.

First Published: Jun 26 2024 | 11:01 PM IST