Bharati Airtel and Reliance Jio are in a position to buy the pan-India 5G spectrum. But closing of the deal remains around Vodafone Idea’s bids for the radiowaves.
The BofA report said that it would be difficult for any telecom the company which did not bid for 5G spectrum in a particular circle to roll out 5G on the existing 4G bands. Because the existing networks are running at a capacity. And hence there is limited scope for the 5G spectrum which could be framed.
“Higher reserve price is something distinctive about the auction and. Hence, companies with higher capital balance sheets could go for the deal unlike Reliance and Bharti. However it remains unclear with VIL how they would fund its 5G bids”. The report said.
Research done by the analysts at BofA were of the view that VIL management has focused on top core circles. And the company may selectively bid in their core 3G and 4G circles.
The report says VIL could opt post 5G due to the required network setup which they lack right now.
An email query which was sent earlier to VIL did not elicit any immediate response.
The report estimates that operators might be interested in 3.5 GHz in this auction as it is the primary band for 5G. While the premium 700 MHz may attract limited interest given its higher pricing and. As it had propagation characteristics which are very much identical to that of 800 and 900 MHz band.
The central government expects to hold the next round of spectrum auction by June-end or early July.
The 5G services are expected to make their way in by August-September.
BofA Securities expects Jio to be a role player in looking to deploy 5G due to its large expenditure strengths, especially standalone 5G, which would motivate other telecom players also to front load capex investments.
“A key challenge could be on the device ecosystem front. Given the semiconductor supply-chain issues and relatively higher price points”. The report noted.