This is why Reliance Jio still won’t get the entire acquired spectrum straightaway

Reliance Jio despite paying Rs 2149.49 crore ahead of time will have to wait for complete allocation of spectrum acquired through recent auction.

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The release from the Ministry of Communications on Friday regarding Bharti Airtel and Reliance Jio paying up additional upfront payment for immediate allocation of unsold spectrum blocks in the same band and LSA in place of the spectrum blocks allocated from a later date might have sent some good vibes among telecom customers. However, both Bharti Airtel and Reliance Jio still aren’t going to get their hands on the entire spectrum acquired through Spectrum Auction 2021 straightaway.

Even though DoT hasn’t given the finer details of the arrangement between DoT and the two telecom service providers, the microscopic data from earlier DoT releases including Demand Note, Provisional Frequency Assignment, and Amended Annexure F make it clear that allocation of entire frequencies acquired through Spectrum Auction 2021 will remain stretched till early October 2021.

The main issue is that the administratively allocated spectrum assignments in the 800 MHz, 900 MHz, and 1800 MHz band are expiring in different timelines across different LSAs and different bands. On top of that, the spectrum surrendered by BSNL-MTNL in the 900 MHz and 1800 MHz band put to auction by DoT through an amendment to the NIA in late January 2021 also isn’t straight away available as per the amended NIA.

Let us take at a look at the payable amount to DoT for the spectrum acquired along with the payment made by TSPs till date as per DoT for the same followed by the unsold spectrum block availability in LSAs and bands wherein there is a delay in allocation of frequencies.

Payable Amount and Payment Received by DoT

Payment - DoT Spectrum Auction 2021

The most important part after successfully bidding for spectrum blocks is to pay up the payable amount in time. Given the availability of deferred payment options the trio private operators opted for the same. The trio had to shell out Rs 21918.47 crores by 18th March 2021 as per DoT’s demand note as upfront payment for immediately available spectrum blocks. DoT’s press release on Friday confirmed the exact amount being recieved by 18th March 2021 from the trio operators.

The next part involves the frequencies available from a later date due to delay in expiring of existing assignments. The terms and conditions in the NIA notes that in such cases the required 25%/50% upfront payment payable at the time of auction completion shall be 10% of the bid amount for sub-1 GHz bands and 20% of the bid amount for other bands with balance component of upfront payment to be made one month prior to the assignment of frequency.

The balance component payable by Vodafone Idea, Reliance Jio, and Bharti Airtel amounts to Rs 5686.33 crores whereas excluding Vodafone Idea it amounts to Rs 5582.83 crores. Notably, DoT has stated it has received only Rs 2,306.97 crore as upfront payment for immediate spectrum allocation from Bharti Airtel and Reliance Jio.

Reliance Jio’s deferred upfront payment for frequencies available at a later date amounts to Rs 4919.37 crores whereas it has currently paid-up Rs 2149.59 crores out of the same for immediate allocation of spectrum.

The difference in upfront payable amount and the payment received by DoT immediately rather than in August/September 2021 clearly hints that certain payment for allocation of spectrum will be done later this year.

Next, we take a look at the frequencies available at a later date based on provisional assignment and availability of unsold spectrum blocks in various bands and LSAs to understand what’s at play here.

Availability of Unsold Spectrum Blocks

1800 MHz Band – Reliance Jio

In the 1800 MHz band, Reliance Jio is affected by delayed availability of spectrum blocks in multiple circles namely Andhra Pradesh, Assam, Delhi, Karnataka, Maharashtra, Mumbai, North East, Punjab, Tamil Nadu, and Uttar Pradesh (East).

In Andhra Pradesh, Reliance Jio has 2.0 MHz or 10 spectrum blocks with delayed availability whereas 30 spectrum blocks with immediate availability went unsold.

In Delhi, Reliance Jio has 4.60 MHz or 23 spectrum blocks with delayed availability whereas 37 spectrum blocks with immediate availability went unsold.

In Maharashtra, Reliance Jio has 5.00 MHz or 25 spectrum blocks with delayed availability whereas 70 spectrum blocks with immediate availability went unsold.

1800 MHz - Reliance Jio

In Mumbai, Reliance Jio has 3.40 MHz or 17 spectrum blocks with delayed availability whereas 32 spectrum blocks with immediate availability went unsold.

In North East, Reliance Jio picked up the entire 3.6 MHz put to auction by DoT leaving no unsold spectrum blocks. The spectrum notably was surrendered by BSNL earlier this year but won’t be available before September 2021.

In Punjab, Reliance Jio has 1.0 MHz or 5 spectrum blocks with delayed availablity whereas an ample amount of 43 spectrum blocks went unsold with immediate availability.

In Uttar Pradesh (East), Reliance Jio has 3.6 MHz or 18 spectrum blocks with delayed availability whereas 44 spectrum blocks with immediate availability went unsold during the auction.

In Assam, Reliance Jio has 3.80 MHz or 19 spectrum blocks with delayed availability whereas only 11 spectrum blocks with immediate availability went unsold.

In Karnataka, Reliance Jio has 5.0 MHz or 25 spectrum blocks with delayed availability whereas only 8 spectrum blocks with immediate availability went unsold.

1800 MHz - Tamil Nadu Reliance Jio

In Tamil Nadu, as we covered earlier in the Airtel article there is only 1 unsold spectrum with immediate availability whereas Jio’s need is for 8 spectrum blocks with immediate availability.

800 MHz Band – Reliance Jio

In 800 MHz band, Reliance Jio is affected in Andhra Pradesh, Bihar, Delhi, Haryana, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (West), Uttar Pradesh (East), and West Bengal due to delayed availability of spectrum blocks.

800 MHz - Reliance Jio

However, the quantum of spectrum available on a delayed date is the same amount as the quantum of spectrum currently assigned to Reliance Jio and Reliance Communications set to be available this year post expiry of existing assignment in many circles.

In Bihar, Delhi, Haryana, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (East), Uttar Pradesh (West), and West Bengal this equation fits well. The amount of spectrum expiring this year matches the amount of spectrum with delayed availability.

Given the smaller number of spectrum blocks in 800 MHz due to the 1.25 MHz block size, these frequencies are already more or less with Reliance Jio and current in use. Reliance Jio and Reliance Communications are currently sharing a spectrum in all LSAs bar Gujarat and Jammu and Kashmir. Eventually, the spectrum will become Reliance Jio’s own given currently it is in the name of Reliance Communications in multiple circles.

However, in Andhra Pradesh, Mumbai, and Odisha the amount of spectrum expiring this year differs from the quantum of the spectrum with delayed availability.

800 MHz - Reliance Jio Expiry

There are unsold spectrum blocks available in multiple LSAs with immediate availability in the 800 MHz band.The chances of Reliance Jio having asked for immediately available unsold spectrum blocks in 800 MHz band is probably unlikely.

Conclusion

The delayed upfront payment for the 800 MHz band is Rs 2559.18 crore whereas the same for the 1800 MHz band is Rs 2360.1 crore. Reliance Jio notably paid Rs 2149.59 crores to DoT as an advance in April rather than delayed payment in August/September 2021.

Given the amount of delayed spectrum block availability in Jio’s case, there are a lot of possibilities and it won’t be possible to identify the exact ones they have paid for without DoT revealing them.

A wild guess would be Andhra Pradesh, Delhi, Mumbai, Maharashtra, Punjab, and Uttar Pradesh (East) in the 1800 MHz band for which the upfront payment is close to what Reliance Jio paid although the combination may be potentially wrong. Nevertheless, the main point being Reliance Jio regardless of the advance payment will still wait for the complete allocation of spectrum blocks along with Bharti Airtel and Vodafone Idea.

Vodafone Idea notably in poor financial health didn’t opt for any arrangement with DoT similarly to Bharti Airtel and Reliance Jio and will wait till October 2021 for complete allocation of acquired spectrum.

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Avatar of Basil Kannagi Arasu
Basil Kannagi Arasu

Editor-in-chief

Basil keeps an eye on the latest happenings in the Telecom sector. In his free time, you can find him streaming the Premier League which he started watching in 2013.

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Even jio can't get B5 quickly ? Because already jio sharing rcom B5 spectrum

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