This band will be acquired in Andhra Pradesh, Delhi, and Mumbai circles through spectrum trading. Interestingly, this band falls in the sub 1GHz category and is crucial for initial 5G deployment in the country.
Through this agreement, Airtel will receive a consideration of Rs 1037.6 crores from Jio for the proposed transfer. In addition, Jio will assume future liabilities of Rs 459 crores relating to the spectrum.
Details of the Transaction
The details of the spectrum sharing are as below:
|Circle||800 MHz Band|
The agreement follows the guidelines issued by DoT on Spectrum Trading. As of now, this transaction is subject to the regulatory and statutory approvals required.
Notably, the total value for the right to use this spectrum is Rs. 1,497 crores. This includes the present value of associated deferred payment liability of Rs. 459 crores, subject to any transaction-related adjustments.
Reliance Jio will now have 2X15MHz of spectrum in 800 MHz bands in the Mumbai circle. Similarly, 2X10MHz of the spectrum of the same band is in Andhra Pradesh and Delhi circles.
This will consolidate Reliance Jio’s spectrum in these circles and will improve quality in the said areas.
Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel said: “The sale of the 800 MHz blocks in these three circles has enabled us to unlock value from the spectrum that was unutilised. This is aligned to our overall network strategy.”
Why is it Important for Reliance Jio?
With the enhanced spectrum footprint, especially contiguous spectrum, and superior infrastructure deployed, Reliance Jio has further increased its network capacity. However, the transaction is subject to the requisite regulatory and statutory approvals.
Incidentally, this spectrum band is very important for the 5G rollout. Since Bharti Airtel bought a huge amount of it on the 4G spectrum auction conducted last month, this sharing will benefit Reliance Jio and allow them to deploy 5G faster.
Also, this indicates is that 5G will come to Delhi, Mumbai, and Andhra Pradesh first. What’s more interesting is that these circles have immense marketability and hence strategic value.
In the end, there could an almighty scuffle for the race to rollout 5G first.