As India’s largest telco, Reliance Jio, submitted three times the earnest money deposit (EMD) in comparison to its nearest competitor Bharti Airtel, experts agree this confirms Reliance’s aggressive strategy to use this opportunity to cement its lead in the 5G race.

Reliance Jio’s EMD of ₹14,000 crore means the telco is willing to shell out ₹1.27-lakh crore in the upcoming auctions, according to experts. Bharti Airtel’s expected outflow of ₹48,000 crore (for an EMD of ₹5,500 crore) pales in comparison of Reliance’s aggressive bidding strategy. Vodafone Idea is likely to buy ₹20,000 crore worth of spectrum as per the EMD of ₹2,000 crore submitted by the operator. Adani, which was looking to set up private networks at its existing facilities, will be only putting a bid of ₹600 crore on the basis of their token EMD of ₹100 crore.

Taking the lead

If Jio bids as per these expectations, it will come out of the auction with the most and optimal 5G spectrum as per industry recommendations in order to put the best possible 5G network. It will have adequate spectrum in the sub GHz band (700MHz), allowing it to provide long distance and indoor 5G coverage. Using this spectrum, Jio can set up a more mature standalone 5G network at a later date. It will also have the cleanest and the most contiguous spectrum in 3.5GHz, and it could also strategically bid to ensure that part of Airtel’s spectrum in this band falls in “unclean” band. This will position Reliance Jio to be miles ahead of any operator, when it comes to rolling out the best possible 5G services. Jio is also looking to consolidate its position in existing 4G spectrum bands as well.

Neck and neck

Bharti Airtel, which is the only operator financially capable of giving Jio a run for its money, has likely completely skipped 700MHz this time around. While experts note that it could place some bids in other sub GHz bands such as 900MHz, it will not be an adequate sub GHz spectrum for a 5G network that can cover long distances. This means Bharti will have to put in more capex to provide clean coverage. Bharti Airtel might also have a part of the spectrum that it purchases in 3.5GHz be unavailable in certain geographies, if Jio bids as experts project. Bharti is also going to be bidding for existing 4G bands.

Experts note that Vodafone Idea’s EMD will only allow the operator to buy half the amount of 5G spectrum that other operators are purchasing. Vodafone Idea’s spectrum will also be patchy in certain geographies in 3.5GHz if operators bid as per their EMD. Each operator is likely to buy substantive spectrum in mm-wave (26GHz) since it is the cheapest spectrum, best suited for initial 5G use-cases and will reduce the spectrum usage charge paid by the operators.

Adani is likely only placing a bid for 100MHz of 26GHz spectrum in 22 LSAs for private network rollout.

Who may take how much

While an EMD is a token deposit that the operators have to put in to place bids in specific bands, an operator is not required to bid the required maximum amounts that their EMD indicates. This means that the operators can still bid lower than the set expectations. For core 5G bands, an expert explained the bidding strategy for the four participants.

According to the expert, Reliance Jio’s massive EMD will empower the operator to bid for 15MHz in 700MHz, 100MHz of 3.5GHz and 800MHz of 26GHz or the mm-wave band. Bharti Airtel’s EMD indicates that the operator is giving 700MHz a skip for now; it can bid for 80MHz of spectrum in the 3.5GHz band and 800MHz in the 26GHz band, and it might skip 2100 MHz, according to the expert. Vodafone Idea’s EMD will allow it to bid for 40 MHz in the 3.5GHz band and 400MHz in the 26GHz band.