As for status quo, the most expensive spectrum that lies in the 700 MHz band remained unsold once again, in a repeat of the 2016 story, as chart 1 shows.
The indifference towards 700 MHz suggests there won’t be takers unless the price is reduced further. The government and the regulator may have to remember this while putting up 700 MHz on sale along with 5G spectrum auction
in some months. Although buying this time was more spread out, about 63 per cent of the pie on offer went unsold — one of the highest in a decade (see chart 2).
Mukesh Ambani-owned Jio spent aggressively, at more than Rs 57,000 crore, to buy 489 MHz of airwaves across three bands. Airtel’s buying was across five bands, concentrated in 900 MHz and 1800 MHz, shows chart 3.
Now, spectrum blocks in more populated and developed regions are costlier than those in the sparsely populated and less economically active areas. A comparison shows that market leader Jio spent more money per MHz of spectrum (chart 4) than Airtel, suggesting that it probably expects strong consumption growth in areas with good tele-density.
The silver lining is that the financial situation of telcos has improved. Average revenue per user (ARPU) per month has grown linearly since the tariff hike of 2019, shows chart 5.
Chart 6 illustrates how subscribers migrated from one operator to the other in 2020 — the of churn in the context of data consumption vis-à-vis tariff. While flow of new customers to Jio is declining, Airtel has been consistently gaining subscribers on the back of post-paid plans that lift ARPU up.