The Indian government plans to auction 275 MHz of spectrum in the 3.3 GHz to 3.6 GHz range for 5G services. This auction will probably take place in the first half of 2022.
“This represents a huge potential step-up in the spectrum resources available to the Indian telcos,” wrote New Street Research analysts led by Chris Hoare. “The three MNOs currently hold just 289 MHz – far below global norms; 275 MHz would almost double this.”
The three primary mobile network operators in India are Bharti Airtel, Reliance Jio and Vodafone Idea Limited.
The New Street analysts note that the proposed reserve prices for the 3.3-3.6 GHz auction are high, at $0.05 per MHz pop. “However, we think that the MNOs should be prepared to pay to acquire substantial holdings in this auction (to the extent that balance sheets allow) because of the material increase in network capacity that can be unlocked,” wrote the analysts.
In March, the Indian government held some spectrum auctions in a number of bands. But for its auction in the 700 MHz band it received zero bids because the price was too high at $0.34 per MHz pop.
However, the big three Indian carriers did bid on other spectrum bands. Reliance Jio spent $7.8 billion, Bharti Airtel spent $2.55 billion, and Vodafone Idea was a distant third with bids worth $272 million.
For the 2022 auction in the 3.3-3.6 GHz range New Street said, “Reliance Jio is likely to be an enthusiastic bidder. To buy 100 MHz nationwide would cost $6.7 billion, which is feasible for Jio. We would also expect Bharti to be an enthusiastic bidder, and at least try to match Jio in the auction. Vodafone Idea will struggle to have any meaningful participation in the auction as currently planned, given its funding constraints.”
5G in India
New Street said the new spectrum is particularly well suited for the use of massive MIMO technology, which promises a large step-up in spectral efficiency. “We estimate that with this higher spectral efficiency the MNOs’ aggregate downlink capacity could increase four-fold,” they wrote.
If the Indian operators do secure spectrum in the 3.3-3.6 GHz range, they will be able to deploy 5G in the country for the first time. However, subscribers would need to own a 5G phone to tap 5G services.
Many people in India can’t afford expensive new phones. But New Street said there is a large segment of the population, more than 100 million people, that can afford a high-end phone and would likely be motivated to tap 5G on the new spectrum in order to escape the congested 4G bands.
The upstart mobile operator Jio has already surpassed a total subscriber base of 410 million. In January Jio said it was working on 5G technology. The company said it had an “indigenously developed" 5G radio integrated with its own 5G core network and 5G smartphones, and the combination of technology has achieved over-the-air throughputs in excess of 1 Gbps. Jio also said it has in-house massive MIMO and indoor 5G small cells “under advanced stages of development.”