According to a BofA Securities research released on Monday, Reliance Jio and Bharti Airtel are in a position to buy pan-India 5G spectrum, but uncertainty surrounds Vodafone Idea's bids for the radiowaves.
According to the study, it will be difficult for any telecom provider that has not bid for 5G spectrum in a given circle to roll out 5G on existing 4G bands because existing networks are at capacity and hence there is limited free spectrum that can be carved out.
"Higher reserve prices are likely to deter new telcos from bidding in the auction, leaving only telcos with solid bank sheets, such as RIL and Bharti, to purchase pan-India 5G spectrum. It's unclear how VIL plans to fund its 5G bids "According to the report,
Vodafone Idea (VIL) management, according to research analysts at BofA, has focused on top core circles and may selectively bid in their core 3G and 4G circles.
"We expect VIL to be substantially more vulnerable after 5G if it does not receive pan-India 5G spectrum," according to the study.
An email inquiry on the report made to VIL received no immediate response.
According to the BofA study, operators may be interested in 3.5 GHz in this auction because it is the key band for 5G, although the premium 700 MHz band, with its high cost and propagation characteristics similar to the 800 and 900 MHz bands, may draw less interest.
"Even if the government decides to auction this time, interest on 28 GHz is likely in the future auction," the paper stated.
The government plans to hold the next round of spectrum auctions by the end of June or the beginning of July. By August-September, 5G services are scheduled to be available in the country.
This week, the Department of Telecom is expected to submit a proposal for a 5G spectrum auction to the Union Cabinet for final approval.