Reliance Jio splashes out $8 billion in Indian airwaves auction

Reliance Jio Infocomm, the telecoms company backed by Indian billionaire Mukesh Ambani and tech giants Facebook and Google, won airwaves worth about $8 billion in a $10.6 billion spectrum auction that closed on Tuesday.

Jio picked up a total of 488.35 megahertz (Mhz) in frequency bands of 800 Mhz, 1800 Mhz and 2300 Mhz, India's telecoms secretary Anshu Prakash told reporters.

The top three Indian wireless carriers - Jio, Bharti Airtel and Vodafone Idea - together bought airwaves worth 778.15 billion rupees ($10.60 billion) at the close of the two-day auction, Prakash said.

Airtel purchased spectrum worth 186.99 billion rupees, while Vodafone Idea bought airwaves for 19.93 billion rupees.

Both Jio and Bharti said the additional airwaves will help them to serve hundreds of millions of new users, in addition to existing customers, while Vodafone said its new airwaves will help it to enhance 4G coverage and capacity.

"With our increased spectrum footprint, we are ready to further expand the digital footprint in India as well as get ourselves ready for imminent 5G rollout," Reliance Chairman Mukesh Ambani said in a statement.

Ambani, who won the backing of Facebook, Google and Qualcomm for Jio's parent company last year, has previously said his company is looking to launch 5G services in India during the second half of 2021.

Jio will make an upfront payment of 199.39 billion for the airwaves, it said. The remainder will be paid over 18 years.

Ambani bet more than $30 billion on Jio, which was launched in late 2016. Its free voice services and cut-price data forced some rivals out of the market while others had to consolidate.

"Spectrum acquisition for bolstering the data capabilities remained the theme of these auctions," Ankit Jain, Assistant Vice President at rating agency ICRA, said in a note, adding that telecoms sector debt levels would rise to about 5 trillion rupees by the end of March 2022.

($1 = 73.3870 Indian rupees)