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Reliance Jio eyeing a bigger pie in 5G auction? Deposits 14k crores as EMD

Following the release of a list of pre-qualified bidders by the department of telecommunication, for the 5G spectrum auction, Reliance Jio on Monday deposited 14000 crore rupees as earnest money deposit for the auction.

Reliance Jio, Bharti Airtel, Vodafone Idea, and Adani Data Networks Limited owned by Adani Group were the telecom companies who got qualified for bidding in the auction.

While Bharti Airtel deposited 5500 crore rupees as earnest money deposit, Vodafone Idea deposited to 2200 crore rupees as EMD. The lowest EMD deposit was by Adani Data Networks Limited, as the telecom entity only deposited 100 crores as EMD. All together the 4 telecommunication companies who got qualified for the bidding have deposited 21800 crore rupees as EMD to the Indian government.

The high amount of deposit by Reliance Jio indicates the intentions of the company owned by Reliance Industries to acquire the majority of the spectrum through the auction. The EMD deposit of 100 crore rupees by Adani enterprises also indicates that it is only focusing on acquiring low band 5G spectrums which could be possibly used for internal uses in several parts of the country.

Adani company had earlier announced that they would not be venturing into customer-based internet servicing, as they were only planning to take spectrums for internal purposes. Various sources suggest that Adani probably would focus on millimetre waves so that they can establish private networks.

What is Earnest Money Deposit?

An earnest money deposit is the assurance of payment by an operator to the government, which would give an indication of the company’s strategy and plans for acquiring spectrum in the auction. Normally, if a company deposits a huge amount as EMD, it is showing its intention of putting up larger bids for larger quantities of the spectrum.

According to the list published by the department of telecommunication, Reliance Jio has the highest number of Eligibility Points, having 1,59,830 EP. This is the highest among the four builders. Airtel which had the second-highest EMD got nearly, 66330 EPs while Vodafone Idea got 9370 EPs. With the lowest EMD, Adani received 1650 EPs from the department of telecommunication.

The union cabinet on June 15th 2022 gave approval to a proposal submitted by the department of telecommunication to conduct a spectrum auction for the 5G spectrum. The most successful bidders in the spectrum auction would be assigned high band 5G spectrums, which would be used to provide services to the public and enterprises. According to a press release by the press information bureau, soon after the release of 5G service, internet speed would be 10 times faster than 4G. A total of 72097.85 MHz of the spectrum with a validity period of 20 years is expected to be put up to auction.

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