In the online auction process of the high-frequency 5G spectrum, four rounds have been completed on Day 1 on Tuesday, raking in record revenue of around ₹1,45,000 crore to the government. The fifth round of the 5G auction has started, and the auction process is expected to conclude today.

Reliance Jio, Bharti Airtel, Vodafone Idea and Adani Group are participating in the country’s biggest-ever auction process of the high-frequency airwaves. The fifth-generation or 5G network will allow data transmission at a very high speed -- about 10 times -- than the current 4G network, due to its low latency.

Overall, the government seems to have received a strong response from bidders on Day 1, especially for the expensive low-frequency 700 MHz band, contrary to initial expectations of the Centre collecting a revenue of ₹80,000-₹1 lakh crore from the 5G auctions, it seems have generated much more.

Union information technology minister Ashwini Vaishnaw, speaking to the media yesterday, sounded upbeat and said the government aims to start the 5G services in India by September-October.

The top three bidders -- Reliance Jio, Bharti Airtel and Vodafone Idea -- placed bids at the base price for mid-band and high-band airwaves. The auction was conducted in the low-frequency bands of 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, and 2,300 MHz; mid-frequency band of 3,300 MHz; and a high-frequency band of 26 GHz.

On Day 1, spectrum worth 50.52 GHz was sold at the aggregated price of ₹1,45,263 crore, with telcos consuming a total of 75% earnest money deposit (EMD). Today's auction process could see most bidding from Reliance Jio and Bharti Airtel, with Vi and Adani Networks having bid and left with very little EMD.

The country's largest telco Reliance Jio Infocomm has made an earnest money deposit of ₹14,000 crore for the 5G spectrum auction. Sunil Mittal-led Bharti Airtel has forked over the second highest amount as EMD at ₹5,500 crore. The amount deposited by Airtel is around 40% less than Jio's EMD payment.

Embattled Vodafone Idea has furnished an EMD of ₹2,200 crore, despite a net worth of negative ₹80,918 crore. Gautam Adani-led Adani Data Networks, which is the network service provider arm of Adani Group, has submitted ₹100 crore as EMD to offer 5G services in its captive networks. The amount paid as EMD indicates the company's plan on how much spectrum it aims to buy in the auction.

Based on their deposits, Reliance Jio Infocomm, Bharti Airtel, Vodafone Idea and Adani Data Networks have been allocated 1,59,830, 66,330, 29,370, and 1,650 points, respectively.

The successful bidders can make payments in 20 equal annual instalments, duly protecting the NPV (net present value) at the interest rate of 7.2%. The spectrum acquired through the auction can be surrendered after a minimum period of 10 years.

5G is likely to result in slightly higher average revenue per user (ARPU) (15 to 20% more) for Reliance Jio and Airtel as it relates to consumer mobility services, says Sunil David, co-chair, digital communications working group, IET Future Tech Panel. "As far as the enterprise segment is concerned, the wait will be longer to really monetise the 5G investment and I would expect real returns to show up after 2 to 3 years by which time the 5G ecosystem and use cases would evolve."

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