Ambani Vs Adani : India’s two richest people are about to face off in a battle for 5G.

The battle for India’s fifth-generation airwaves is luring some of the country’s richest tycoons, with
billionaires Mukesh Ambani and Gautam Adani joining a raft of players expected to bid as much as $14 billion for frequency rights that could decide who dominates the digital era.
While Ambani’s Reliance Jio Infocomm Ltd. has paid the highest pre-auction deposit signaling it’s likely to be the most aggressive bidder in the sale that starts today, it is the surprise entrant Adani Data
NSE -0.73 % . whose bids will be closely watched as rivals try to map out its telecom ambitions.
Wireless operators NSE 0.84 % ., led by billionaire Sunil Mittal, and NSE -0.56 % . — a joint venture between Vodafone Group Plc and Kumar Mangalam Birla’s group — are the other bidders.

The airwaves sale could raise as much as 1.1 trillion rupees ($14 billion), according to a June estimate by local rating company NSE -0.88 % . The empire of Adani, who overtook Ambani as Asia’s richest man earlier this year, is downplaying its foray into a new playing field for the group. It said its interest in 5G waves is about “private network solutions” and enhancing cybersecurity at the firm’s airports and ports, with no intention of entering the consumer mobile space currently dominated by Ambani.

Still, the move comes as the two men increasingly tread the same ground, with Adani in particular making
investments in sectors traditionally associated with Ambani, who disrupted India’s telecommunications industry almost six years ago with NSE 0.05 % Jio’s ultra-cheap services. India is at a crucial juncture in its digital development, with many companies — including multinationals like Inc and Walmart Inc — vying for a piece of the intersection between mobile and the nascent e-commerce landscape.
Speculation that 5G is set to become a flashpoint between Ambani and Adani was quelled somewhat, however, when Adani Data paid only 1 billion rupees as a deposit for the auction. The payment is widely viewed by brokerages as a key indicator of the level of interest by a bidder Adani Data’s small deposit, which was in line with its announcement to create only a private 5G network and not become a full-fledged wireless operator, helped defray some of the anxiety among industry incumbents.

Reliance Jio deposited 140 billion rupees, considerably higher than Bharti Airtel’s 55 billion rupees and Vodafone Idea’s 22 billion rupees, according to data provided by the government.
“Whether it is Adani or Ambani, India will benefit from a massive 5G roll out,” said Utkarsh Sinha, Managing Director, Bexley Advisors, a boutique investment banking firm. “Adani’s entrance has shaken up entrenched Reliance Jio and the massive earnest money commitment shows that they see the 5G value proposition and can’t afford to lose out on it.”

The auctions will be a financial boost for Prime Minister Narendra Modi’s government, which is trying to tame inflation and rein in the fiscal deficit. The South Asian nation plans to sell 72 gigahertz of airwaves for a 20-year tenure in various frequency bands ranging from 600 megahertz to 26 gigahertz. India has also allowed firms to pay in 20 equal installments with no upfront payment as it tries to catch up with other countries, such as South Korea and China, that have had 5G networks for years.

What Analysts Think
Nomura Holdings Inc. (Aditya Bansal) Concerns around Adani Group’s entry in the telecom sector have eased after it submitted modest earnest money deposit; outlay will likely be about 8 billion rupees to 10 billion rupees Reliance Jio has submitted much higher earnest money deposit in the past auctions; expect potential outlay at around 405 billion rupees to 600 billion rupees Bharti Airtel’s overall outlay could be about 400 billion rupees and Vodafone Idea’s about 184 billion rupees Credit Suisse Group AG (Led by Varun Ahuja) Reliance Jio’s high earnest money deposit is an enabler and doesn’t necessarily mean materially higher auction spends Bharti Airtel is likely to restrict its bidding to 5G spectrum — 100MHz in 3.5GHz band and 500MHz in 26GHz band;may selectively add spectrum in 900MHz and 1800MHz bands in circles such as Delhi, Mumbai and Kolkata among others.Vodafone Idea’s deposit sufficient to acquire minimum 5G spectrum.

Morgan Stanley (Led by Gaurav Rateria) Given enough availability of spectrum, sharp aggression or bidding higher than the reserve price appears unlikely Reliance Jio’s earnest money deposit allows flexibility to go beyond 5G bands and bid either for the existing bands it has or new bands CLSA (Led by Deepti Chaturvedi). Key surprise is the low earnest deposit money by Adani, lower than even Vodafone Idea’s Reliance Jio and NSE 0.84 % will likely lead the auction Vodafone Idea’s earnest money deposit not enough to bid for pan-India or even all of its established markets’ 5G spectrum.

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