Asia’s Richest Men Push for the Control of 5G in India

Image Source: B Recorder

The biggest 5G airwaves auction in India has concluded after seven days, potentially paving the way for a digital arms race between Mukesh Ambani and Gautam Adani, two of Asia’s richest men, for control of India’s future.

The auction featured a spectrum with a total of 72 gigahertz up for grabs. India’s telecommunication minister, Ashwini Vaishnaw, reported that 71 percent of the inventory was sold.

The three incumbent operators, Mr. Ambani’s Reliance-Jio (R-Jio), Vodafone Idea, and Bharti Airtel, as well as a fourth, recent entry, Adani Data Networks, submitted proposals totaling almost $19 billion to the government.

According to CRISIL Research, total bids have more than doubled from the previous auction in March 2021, beyond expectations.

R-Jio won the auction, paying $11 billion for spectrum, while the Adani group only put down approximately $26 million. Vodafone Idea and Bharti Airtel submitted the final bids.

While it is rumored that Bharti Airtel and R-Jio made bids for pan-India airwaves, cash-strapped Vodafone Idea only made investments in priority sectors.

According to a statement by Jio, the technology company is most prepared for the implementation of 5G because of its widespread fiber presence and solid international collaborations across the technology ecosystem.

In a market in which it has previously made significant investments, the Adani Group made a proposal for private spectrum that would be usable in certain locations like ports or airports.

With a net worth of more than $112 billion, Mr. Adani just surpassed Bill Gates to rank as the fourth-richest person in the world. He runs a vast operation that covers ports, airports, and power. Mr. Ambani’s R-Jio is now a well-known name in India’s internet sector.

Analysts claim that while the Adani Group has stated that it is not interested in competing in the larger market outside of the private spectrum, this may only be the first move in that regard.

The brewing competition for 5G

The move will make Vodafone Idea and Bharti Airtel nervous because the two telecom companies are still recovering from the pricing warfare that R-disruptive Jio’s arrival and price cuts in 2016 set off. They could now face additional competition from yet another billionaire with huge pockets.

For Mr. Ambani, it’s an unexpected showdown with a foe who has so far avoided what is considered to be his territory.

A new age of lightning-fast internet is poised to begin with the launch of 5G in India, enabling the use of cutting-edge connected devices and persuading video downloads in mere seconds.

Indian telecom firms have so far refrained from charging more for 4G plans as opposed to 2G or 3G plans, but they are likely to benefit from charging higher fees for 5G due to the faster speeds that would be available.

A statement from Nomura predicts that 5G tariff plans will increase telecom companies’ profits.

But given the probability of higher costs and the fact that just approximately 7% of India’s total smartphone market is 5G-enabled, 5G will be adopted by India gradually.

While India’s fiscal deficit, or the difference between revenues and expenses, is predicted to reach 6.4 percent, the auction’s record proceeds—the biggest compared to the other seven rounds since 2010—will aid in shoring up the government’s finances.

The Department of Telecommunications in India will reportedly receive $1.6 billion up front over the next 20 years, according to analysts.

By the end of August, the government should have finished assigning airwaves, and by early October, 5G services should be available.

Opinions expressed by San Francisco Post contributors are their own.

Anthony Carter

I’m Anthony and I finished my degree graduate studies on Public Administration and I spend most of my free time in contributing written works about community development, public administration and lifestyle.

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