900 MHz spectrum bidding turned too risky at 100% premium: RIL
14 Feb 2014
Reliance Jio Infocomm opted out of the bidding for the 900 MHz spectrum after the bidding turned risky with bids going up to 100-per cent of the reserve price of the spectrum, the company said today.
Reliance Jio will pay a 31-per cent premium for the 1800 MHz band spectrum it successfully bid in the 14 telecom circles against the 55 to 100 per cent premium the winning bidders of the 900 MHz spectrum will pay over the reserve price.
A day after the bidding war ended, Reliance Industries, which owns Reliance Jio, said the acquisition of the right to use this technology-agnostic spectrum for a period of 20 years will cost the company Rs11,054 crore.
Of this, Reliance Jio plans to make an upfront payment of 33 per cent with the balance payable in 10 equal annual instalments after a two year moratorium, as per DoT's terms.
Reliance Jio plans to use the 1800 MHZ band spectrum acquired in the just-concluded auction in conjunction with its pan India 2300 MHz spectrum to address the expected surge in demand for digital services as well as to enhance in-building coverage.
It acquired the right to use spectrum, ranging from 2x5 MHz to 2x7 MHz in 14 circles across India in the 1800 MHz band in the auction that concluded on Friday.
The company plans to provide seamless 4G services using FDD-LTE on 1800 MHz and TDD-LTE on 2300 MHz through an integrated ecosystem.
Reliance Jio has won the spectrum in the 1800 MHz band in all the three metros of Delhi, Kolkata, Mumbai besides the Category A circles of Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Category B circles of Kerala, Madhya Pradesh, West Bengal and Category C circles of Assam, North East and Odisha.
With this, RJIL's total spectrum footprint has increased from 440 MHz to 597.6 MHz (including uplink & downlink).
''With this acquisition, Reliance Jio will be the holder of the largest quantum of liberalised spectrum and with the longest residual spectrum life. Reliance Jio's seamless 4G services using FDD-LTE on 1800 MHz and TDD-LTE on 2300 MHz through an integrated ecosystem, aims to provide unparalleled high quality access to innovative and empowering digital content, applications and services,'' Mukesh D Ambani, chairman and managing director of Reliance Industries Limited, said.
Reliance Jio said it would be deploying an enhanced packet core network to create futuristic high capacity infrastructure to handle huge demand for data and voice. In addition to high speed data, the 4G network will provide voice services from / to non-RJIL networks.
There are several mobile phones and devices available today which have the capability to operate both TD-LTE and FD-LTE technologies in the 1800 MHz and 2300 MHz bands as well as conventional 2G / 3G networks.
Rapid strides in global LTE rollouts and introduction of several new chipsets is making LTE enabled smart mobile phones and devices more affordable. In any case, Wi-Fi enabled 2G/3G device can access RJIL's services through an affordable pocket router, the company pointed out.
Reliance Jio said it has finalised key agreements with its technology partners, service providers, infrastructure providers, application partners, device manufacturers and other strategic partners for the project. These strategic partners have committed significant resources, knowhow and global talent to support planning, deployment and testing activities currently underway.
