What made Reliance Jio fight hard for the 700 MHz band in the 5G auction?

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India’s mega 5G spectrum auction recently concluded after seven days and 40 rounds, fetching over Rs 1.5 lakh crore. It saw active participation from players like Bharti Airtel and Vodafone Idea with market leader Reliance Jio topping the bid after pumping in a total of Rs 88,078 crore.

Behind the 700 MHz band

The 700 MHz band, which is generally sold at a higher price, is said to provide better network coverage due to the lower frequency and has the ability to penetrate buildings effectively. This enables telecom operators to offer better, stable and faster connectivity in dense urban areas such as Delhi, Mumbai, Kolkata, etc.

A sub-GHz band (bands below 1000 MHz) provides better coverage with speed without consuming much power. In contrast, the highest band, the 26 GHz frequency band, which can offer higher data rates of more than 1 gigabit per second, may not cover a larger area and its coverage may even be disrupted by trees and buildings. Thus, a sub-GHz band, such as the 700 MHz band, would be more profitable for a company than a GHz band.

In India’s price-sensitive market, telcos are already struggling in the face of stiff competition while struggling to pay royalties tied to soaring adjusted gross revenues. The low average revenue per user (ARPU) in the country has led major telecom players like Jio, Airtel and Vodafone Idea to raise the price of their voice and data plans. Telcos may also need to keep the cost of 5G plans low so more people buy the plans. This may require them to optimize and control spectrum prices.

According to reports, 5G services could be available to the general public by September or October and the government aims to allocate the spectrum by August 15.

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