Mukesh Ambani’s Reliance Jio is set to bid aggressively for 5G spectrum at the auction scheduled to start from July 26, but the Adani group is keeping everyone guessing by holding its cards close to its chest. While Jio has put Rs 14,000 crore as the earnest money deposit on the table, Adani has coughed up just Rs 100 crore as deposit, possibly signalling their intentions in private captive networks. Earnest money deposit (EMD) is reflective of the quantity of airwaves a company can bid for in the auction.

“A deposit of this amount (Adani) can be looked at as a company preparing for various scenarios vis-à-vis competition. However, it may not be correct to conclude that actual bid numbers will be in this range,” an analyst said.

The four players — Reliance Jio, Bharti Airtel, Vodafone Idea and Adani Data Networks – have in all deposited Rs 21,800 crore. According to details shared by the Department of Telecommunications (DoT), Bharti Airtel has forked the second highest amount as earnest money deposit (EMD) at Rs 5,500 crore. Cash-strapped Vodafone Idea has furnished EMD of Rs 2,200 crore, despite a net worth of negative Rs 80,918 crore.

All four pre-qualified bidders can bid in any band in any licensed service area (subject to EPs/EMD/spectrum cap), the DoT statement said. EMD is an assurance of payment by an operator to the government that gives a broad indication of the players’ appetite, strategy and plan for picking up spectrum in an auction. It also determines the eligibility points, through which telcos target a specific amount of spectrum in a given circle. If EMD is higher, the operator has the flexibility to put in higher bids for larger quantities of spectrum.

Market watchers say that a telco has the ability to go after radio waves worth up to 7-8 times EMD amounts submitted by them, although players do tend to keep headroom for manoeuvring and flexibility, based on auction proceeds and the strategy adopted by rivals. An industry expert who did not wish to be named estimated that based on EMD, Jio can place bids worth Rs 1.27 lakh crore, Bharti Airtel Rs 48,000 crore, Vodafone Idea Rs 20,000 crore and Adani Data about Rs 700 crore. According to the DoT list, Reliance Jio has EPs (elgibility points) of 1,59,830 which is the highest among the four bidders, followed by Bharti Airtel at 66,330 and Vodafone-Idea at 29,370. The newcomer, Adani, has 1,650 EPs allocated by the DoT.

While the amount of the earnest money deposit is an indication of the bidding quantum and capacity, analysts point out the scenario may vary during the actual bids. The numbers, analysts said, perhaps end the speculation that Adani could enter the consumer mobile services to take on Mukesh Ambani. Instead, while he will bid for spectrum, the radio frequencies that Adani hopes to acquire are not for consumer mobility, but for a capital-efficient private network to connect his sprawling business operations across India and fuel his data centre foray.

“Adani Data will bid for the 26 gigahertz (GHz) frequency band, which is a 5G band but can be used well for private networks. Instead of waiting for direct spectrum assignment by the government or leasing it from operators, Adani is acquiring spectrum directly via auction. This will give it a lot of flexibility as it may have to fork out only Rs700 crore for this particular spectrum”, the analyst added.

Adani participation will be limited to select circles, which should be enough to create private network solutions. Aggressive participation over more circles remains a key risk, analysts said. A total 72 GHz (gigahertz)of spectrum worth at least Rs4.3 lakh crore will be put on the block. The auction will be held for various low frequency bands (600MHz, 700MHz,800MHz, 900MHz, 1800 MHz,2100MHz, 2300MHz), mid(3300Mhz) and high-frequency bands (26GHz).