Jio, Airtel to gain more market share at the cost of Vi: Reports

In the recently concluded Telecom Spectrum Auction 2021, Reliance Jio turned out to be the most aggressive bidder as it was reported earlier. Jio is likely to have closed the gap with Bharti Airtel and Vodafone Idea on overall airwave holdings, analysts said. Additionally, it is expected that the auction could also lead to Jio and Airtel gaining more market share at the cost of Vi.

- Advertisement - v2-762x150

Goldman Sachs expects “Jio to have largely closed its gap with Bharti and Vi on the total spectrum,” though, notably, data carried on the Jio’s 4G network is almost 2 times that on Airtel’s, and accordingly, the latter’s spectrum holding remains “materially higher vs. Jio”.

The analysts expect both Jio and Airtel, with their bolstered countrywide spectrum footprints, to further grow market share, and see the financially struggling Vi, which was a marginal player in the latest spectrum sale, likely getting weaker.

Vi acquired spectrum in 5 circles after spending a modest amount of Rs 1,993.40 crore. Its future competitiveness could have taken a hit seeing that it has not renewed a sizable chunk of its expiring 1800 Mhz spectrum. Unless it raises funds quickly to ramp up its 4G operations, it could be disastrous for the telco.

- Advertisement -720x200

Jio’s spending at the auction totaled Rs 57,123 crore and Airtel spent Rs 18,699 crore, however, a report by Economic Times says this would only have a marginal impact on their balance sheets, “by likely raising their respective leverage levels (read: net debt to Ebitda) to roughly around 2.4x and 3.6x from 0.7x and 3x now.”

Analysts believed it was a “smart move” by Airtel to plug gaps in its sub-GHz spectrum holdings by opting to bid for 800 Mhz airwaves in key markets – Madhya Pradesh, UP-West, and Haryana — where it did not have 900 Mhz spectrum, “that would tone up its 4G coverage and also enable limited-scale 5G rollouts in key markets”.

However, Airtel’s decision to not renew the 1800 Mhz spectrum in Mumbai, Maharashtra, Gujarat, and Haryana was defended by the analysts saying that it was “purely need-based” as it has adequate back-up airwaves in other bands in these circles.

Ankit Jain, assistant vice president, ICRA, said Jio and Airtel’s consolidation of sub-GHz spectrum bands “will be crucial for 5G technology deployments and improvement in indoor coverage.” He added that the appetite for the 2300 Mhz band, in turn, stemmed from the rising mobile broadband usage and thus the need for improving network capacity.

Rajiv Sharma, a telecom expert, said that “Jio’s aggressive bidding signals its efforts to bulk up on sub-GHz, mid-band and capacity spectrum to accommodate a potential surge in its 4G customer base after it launches the much-awaited budget smartphone with Google.”

Recently, Jio Platforms raised more than Rs 1.52 lakh-crore by selling stakes to the likes of American giants such as Google, Facebook, Qualcomm, and Intel amongst others.

At the auction, Jio was the only telco facing a must-buy situation, its airwaves in the 800 Mhz band that it owns and also uses as part of a sharing pact with Reliance Communications (RCom) are expiring in 18 circles in July.



Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles

Stay Connected


Hot Topics


Latest Articles