However, the estimated savings are subject to the operator purchasing a large chunk of 5G radio waves at next month’s auction.
ICICI Securities applies SUC rates to Airtel, Vi, and Jio to 0.4%, 0.4%, and 0.3% of adjusted gross revenue (AGR) when purchasing 500 units of 26 GHz and 100 units of 3.3, respectively. I expect it to plummet. -3.67GHz spectrum for sale in July “.
Currently, Airtel, Jio and Vi SUC payments are 3.2%, 3.1% and 2.9% of AGR, respectively. If the country’s long-distance (NLD) income is included in the telco AGR, the current SUC level will rise to 3.6-4.1% of the AGR range.
However, the spectra acquired at future auctions do not attract SUC, so if the phone company buys a large amount of 5G radio waves for sale in July, the overall payment for these statutory charges will remove 3 and AGR. It will be much less than 1% of. % Floor rate.
ICICI Securities has announced that Airtel, Jio, and Vi’s effective annual payments for 5G spectrum will be approximately Rs 1,200 chlores, Rs 1,100 chlores, and Rs2, after removing the 3% floor and considering annual savings at the SUC front. Expected to drop to 400 chlores.
The government plans to sell 72GHz 5G radio waves in the range of 600MHz to 26GHz at a base price from July 26th. Although the degree is low. The government has set the price of radio waves from 3.3 to 3.6 GHz to 31.7 billion rupees per unit, and 700 million rupees for 26 GHz radio waves.
BNP Paribas also expects increased demand for the 26 GHz spectrum, especially at low cost. This is to help operators significantly reduce SUC outflows without a meaningful investment.
“All three companies will benefit from DoT’s order for SUC calculation, and given the additional benefit of lowering SUC and raising Ebitda, we will acquire a combination of 3.3GHz and 26GHz spectra at the reserved price and deploy 5G services. We look forward to doing so (operating profit), “BNP Paribas said in a memo.
European brokers estimate that if Airtel’s SUC drops from current levels to 1% of AGR, it could increase Telco’s FY24 India Mobile Ebitda by 4.1%. Jio and Vi’s potential mobile Ebitda growth forecasts weren’t immediately available.
However, analysts expect overall bids to remain modest, as booking prices are higher than the telco wanted, and spectral supply is sufficient with the outlook for the annual auction. I am. We also excluded over-bids, as there are only two serious bidders, Jio and Airtel. This is because Vi’s financial struggle continues and the long-term external funding of Rs 10,000 has not yet been completed.