India is likely to defer 5G spectrum auction to sometime in 2021 due to the financial health of telecom operators like Vodafone Idea and Bharti Airtel, and an underdeveloped local ecosystem around the 5G technology. However, the country’s Department of Telecommunications (DoT) will go ahead with 4G spectrum auction within this fiscal period.
A proposal to defer 5G auction was discussed during Digital Communications Commission (DCC) meeting earlier this week. DCC, which is the DoT’s highest decision-making body is now awaiting a Cabinet for the same.
The latest development follows a recent report by the country’s finance ministry that found that the current 5G spectrum price suggested by the Department of Telecommunications (DoT) is too high.
Telecom operators like Bharti Airtel and Vodafone Idea already conveyed to the government about their inability to bid for the 5G spectrum if the government moves ahead with the suggested base price. Both telecom operators wanted 5G spectrum sale to be delayed and were only looking to buy 4G spectrum to expand coverage and capacity in the country.
Reliance Jio, which is the largest telecom operator of India, had also said that the 5G spectrum price was too high, but, it never urged the government to delay the auction.
India is yet to take a call on Chinese telecom vendor Huawei and ZTE’s participation in the country’s 5G networks, which is one of the reasons behind the move to defer 5G spectrum auction in India, as per media reports.
India’s telecom department (DoT) had fixed 5G spectrum price last year based on sector regulator, the Trai’s recommendations in August 2018. The Trai had suggested that Rs 492 crore or $71 million should be the base price per MHz of 3,300-3,600 MHz band, which will be used for providing 5G services in India.
The Indian government was aiming to fetch as $70.9 billion from the auction of 8,300MHz of 4G and 5G spectrum, including 4G spectrum in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz bands, along with 5G spectrum in the 3300-3600MHz range.
Telcos have said that 5G service requires a minimum of 100 Mhz spectrum in the 3.5 GHz band for each operator. However, reports suggest that there is still uncertainty over the availability of the right amount of spectrum for 5G service.
The report by a task force of finance ministry suggested that the government must rationalize all elements of spectrum pricing for the auction, including base price, period of payment of charges and interest rates to enable Indian telecom operators’ participation in the upcoming 5G auction.
“…providing inclusive and affordable 5G services to all sections of the population in the country is important to achieve the NDCP goals. For this, the participation of the private players in the 5G auction should be robust,” the task force said in its report.