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In the much-awaited 5G spectrum auctions, Reliance Jio leads the bidders with a massive ₹14,000 crore deposited as earnest money deposit (EMD) to participate in the auctions, which is three times the amount of its nearest competitor, Bharti Airtel, which has deposited ₹5,500 crore. Ailing operator, Vodafone Idea has submitted ₹2,200 crore of EMD, while, surprise entrant, Adani submitted a token EMD of ₹100 crore.
An earnest money deposit is an assurance of payment in good faith made by operators to the government to assure purchase of high-ticket items, such as the 5G spectrum. If the EMD is higher, the operator has the flexibility to put larger bids for larger quantities of spectrum. The quantum of EMD committed by the operators indicates their bidding strategy and what bands and quantum of spectrum they are interested in.
The Department of Telecommunications released the EMD of each participant on Monday. The much anticipated 5G spectrum auctions will commence next week, and the EMD disclosed will allow market watchers to get a general idea regarding the bidding strategies that the operators have for the auctions.
Reliance Jio’s massive EMD is in line with the top expert’s assessment that the top operator in the country clearly wants to cement its lead in the 5G race. In addition to this, it wants to deprive its competition of prime spectrum as well.
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