Indian telecom operators such as Airtel, Vodafone Idea, Reliance Jio and BSNL are ready to add 5G services to their offerings in order to improve ARPU.
The main concern for mobile service providers is the timing of the 5G spectrum auction and the price of spectrum. The India government is yet to reveal the date for the next round of spectrum auction. But India’s finance ministry is considering spectrum auction as one of the major resources to support Indian economy.
Amid concerns about the deteriorating financial conditions of Indian telecom operators, TRAI today announced reserve price for the auction of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz, 3400-3600 MHz bands.
TRAI said the reserve price of 700 MHz band, which did not receive any attention during the spectrum auction in 2016, should be equal to 2 times of reserve price of 1800 MHz spectrum band. 1800 MHz spectrum is one of the most popular bands for LTE.
TRAI has recommended a reserve price of Rs 915 crore per MHz for the 700 MHz spectrum for Delhi circle, Rs 1,122 crore for Mumbai, Rs 347 crore for Kolkatta and Rs 557 crore for Andhra Pradesh circle.
“We are glad that the TRAI has decided to bring down the price of spectrum, especially for the 700 MHz band,” Rajan S Mathews, director general of Cellular Operators Association of India (COAI), said.
Telecom operators are yet to comment on their need to buy additional spectrum for adding 4G coverage.
TRAI said the reserve price of 3300-3600 MHz band, which will be used for 5G, should be equal 30 percent of the reserve price of 1800 MHz FDD band.
TRAI has recommended a reserve price of Rs 69 crore per MHz for the 3300-3600 MHz spectrum for Delhi, Rs 84 crore for Mumbai, Rs 26 crore for Kolkatta and Rs 42 crore for Andhra Pradesh circle.
“The industry may not be able to cope with the requirements for the infrastructure needed for new technologies and early roll-out of 5G until and unless the SUC, licence fees and other levies are lowered as well,” Rajan S Mathews said.
TRAI has earlier received suggestions from some of the stakeholders asking for conducting the spectrum auction in 2019 when 5G technology is likely to be available for commercial launch in India.
A few stakeholders demanded that India should not conduct spectrum auction for selling 700 MHz and 3400- 3600 MHz spectrum before 2020 because the ecosystem is not yet ready. One stakeholder said that there is no need to auction 3300 to 3600 MHz when 700 MHz band is still unutilized.
Most of the stakeholders are of the view that the reduced coverage of 3300-3400 MHz and 3400-3600 MHz bands as compared to 2300 MHz and 2500 MHz bands would mean higher Capex in the network.
The availability of 5G smartphones will take more time to reach India. The price of 5G phones will not be affordable for majority Indians in the initial phase of the 5G mobile launches.
Some of the 5G use cases suggested by telecom equipment makers such as Ericsson, Nokia, Huawei, ZTE and Samsung, are not even useful for majority of customers in India at present. AR / VR / IoT / M2M / etc. will be for less than 5 percent of the population.
Majority of the Indian telecom operators are not doing well in the 4G space despite making investment in spectrum and networks. Due to competition, ARPU from 4G data did not grow in line with the expectations of the industry. Most of the telecom operators do not have any strong content model to sell to their customers.
Baburajan K
