Indian telecom regulator TRAI is likely to release its much-awaited recommendations on spectrum auction and pricing for 4G and 5G spectrum this week.
TRAI Chairman RS Sharma said the Indian telecom regulator plans to issue this week its recommendations on spectrum auction and pricing for multiple bands, PTI reported.
TRAI chief, however, did not divulge the regulator’s views on the pricing of radio-waves, particularly those in premium bands such as 700 MHz.
India government did not receive any interest from leading telecom operators such as Airtel, Idea Cellular, Vodafone, Reliance Jio and BSNL when it tried to sell the costly 700 MHz spectrum for 4G networks during the spectrum auction in 2016.
An official privy to the development said the recommendations pertaining to the spectrum pricing for 4G and 5G bands could be issued as early as on Wednesday.
Spectrum auction in 2018
The India government is planning to hold the largest-ever spectrum auction of 3,000 MHz radiowaves in the next round of sale, and the regulator’s ensuing views will wrap up almost year-long consultation over the issue.
TRAI in August 2017 issued a consultation paper on spectrum auction for bands like 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, and also other bands like 3300-3400 MHz and 3400-3600 MHz.
The main benefit from the 5G spectrum auction will be for telecom equipment makers such as Ericsson, Huawei, Nokia, Samsung and ZTE. Recently, Nokia has signed a $3.5 billion 5G deal with T-Mobile, the third largest telecom operator in the US. Chipset companies such as MediaTek, Qualcomm, Intel, among others, will also gain from 5G investment.
The industry however has been of the view that operators are not ready for the next round of spectrum auction at this point, given the deep financial stress and ongoing consolidation in the telecom sector.
The Indian telecom industry wants the government to lower the reserve prices to enable participation and ensuring fair market discovery especially in the backdrop of the sector’s financial difficulties.
The sector is reeling under Rs 7.5 trillion cumulative debt, and hyper-competition has only made matters worse for the established operators.
The government had put a total of 2,354.55 MHz of mobile airwaves for sale in the bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz, cumulatively valued at around Rs 5.63 lakh crore at base price during the previous auction held in 2016.
There were no takers for nearly 60 percent of the radio waves, including premium 4G bands, during the spectrum auction in 2016.
In the five-day auction, seven telecom operators had made commitment of Rs 657.89 billion for buying 964.80 MHz of spectrum across multiple frequency bands. The India government could not conduct a spectrum auction in 2017.
Is 5G suitable for India?
Industry analysts are predicting that 5G smartphones, which will be available in 2019 or 2020, will be too costly for wireless subscribers to purchase. The latest 5G deployments in the US are focused on enterprise customers’s broadband needs.
At present, there are no strong use cases from 5G which are suitable for India’s 1000 million plus wireless users.
If Indian operators are still making less than INR 150 or $2 plus ARPU from 4G data services, 5G will be a big disaster in India if the spectrum price is too high.
Baburajan K
