Goldman Sachs expects “Jio to have largely closed its gap with Bharti and Vi on total spectrum,” though it said data carried on the Mukesh Ambani-led telco’s 4G network is almost 2 times that on Airtel’s, and accordingly, the latter’s spectrum holding still remains “materially higher vs Jio”.
They, in fact, expect both Jio and Airtel to further grow market share with their bolstered countrywide spectrum footprints, and see cash-strapped Vi, which was a marginal player in the latest spectrum sale, likely getting weaker.
Vi, which spent a modest Rs 1,993.40 crore in acquiring spectrum in 5 circles, is reckoned to have not renewed a sizable chunk of its expiring 1800 Mhz spectrum, which could hurt its future competitiveness unless it raises funds quickly to ramp up its 4G operations.
Analysts said Jio and Airtel’s latest auction spends — of Rs 57,123 crore and Rs 18,699 crore respectively – would have only 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 said Airtel’s bidding strategy to plug gaps in its sub-Ghz spectrum holdings by opting to buy 800 Mhz airwaves in key markets – Madhya Pradesh, UP-West and Haryana — where it did not have 900 Mhz spectrum, “was a smart move that would tone up its 4G coverage and also enable limited-scale 5G rollouts in key markets”.
They, though, said Airtel’s decision not renew 1800 Mhz spectrum in Mumbai, Maharashtra, Gujarat and Haryana – is “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 for 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 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”.
Jio Platforms recently raised more than Rs 1.52 lakh-crore by selling stakes to the likes of Google, Facebook, Qualcomm and Intel amongst others.
Jio was the only telco facing a must-buy situation as its airwaves in the 800 Mhz band that it owns and also uses as part of a sharing pact with Reliance Communications are expiring in 18 circles in July.