The three current mobile service providers -Bharti Airtel Ltd, Reliance Jio Infocomm Ltd, and Vodafone Idea Ltd – as well as a surprise bidder, Adani Enterprises Ltd.’s unit Adani Data Networks Ltd, will compete in an auction later this month to secure valuable 5G spectrum, which may put a strain on some of their financial statements.
In an auction that will begin on July 26, bidders are anticipated to spend thousands of crores to secure the airwaves. The four companies have until July 19 to withdraw from the auction, and on July 20, the telecom agency will release the final list. Adani Data Networks received a letter of intent on June 28 for the granting of a unified license with authorization of national and international long distance for pan-India service, as well as internet service for the Gujarat circle, according to information released by the department on Tuesday. In case it can win spectrum in certain circles in the auction, the company stated in a filing to the government that it will seek a consolidated license for access services in those particular licensing zones or circles. According to the statement made by Adani Group, Adani Data Networks has a net worth of 248 crores, while its parent company Adani Enterprises has a net worth of 4,731 crores.
The organization has asked the government to examine the parent company Adani Enterprises’ net worth while determining whether or not it qualifies to take part in the spectrum auction. However, the Adani Group had stated in a statement on July 9 that the spectrum would be utilized for its other operations, including offering private network solutions for ports, airports, and power generation and transmission. The paid-up capital and net worth of Reliance Jio Infocomm were both 1.97 trillion and 1.54 trillion respectively. With a paid-up capital of 32,119 crores, Vodafone Idea reported a negative net worth of 80,918 crores. On July 18, the DoT will reveal the pre-qualified bidders and award eligibility points based on the earnest money deposits made by the bidders. The government has recommended applicants deposit enough earnest money to enable them to swap between circles during the auction because the auction regulations allow buyers to bid across license areas in any of the bands. Thus, the EMD of the numbers of blocks in the chosen LSAs in each of the bands along with the eligibility points in the specific round would be combined to determine each bidder’s capacity to submit a bid “In the notice inviting applications for the auctions, the government said this.
“Based on EMD, it will be obvious if it restricts its participation to particular circles among the 22 circles, which ought to be sufficient to develop private network solutions. A major risk still exists from aggressive engagement across more circles, according to analysts at Motilal Oswal Securities Ltd.
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