Bharti Enterprises vice-chairman Rajan Mittal warned that the upcoming 5G spectrum auction could fail if the Indian government doesn’t reduce the base price for airwaves earmarked for high-speed internet services. Rajan is the younger brother of Sunil Mittal, who is the founder of Bharti Enterprises.
Speaking at an industry event, Mittal said that India has already seen two failed spectrum auctions, and it may see a third if the government does not address the 5G spectrum pricing issue. “5G spectrum prices are huge and need to come down.”
Notably, the Indian government’s telecom department (DoT) managed to sell only 37% worth Rs 77,814 ($10.66 billion) crore of the total spectrum put up for sale earlier this month. Private telcos like Reliance Jio, Vodafone Idea and Bharti Airtel didn’t place bids for super-premium and 5G-suitable 700 MHz due to high reserve prices. The 2500 MHz band was also left untouched.
Similarly, India could manage to sell spectrum worth Rs 65,789 crore ($9.87 billion at 2016 exchange rate) only in the October 2016 auction.
Interestingly, India’s antitrust watchdog already said in its report that 5G spectrum in the country is “relatively more expensive” than other countries, and the government needs to ensure that telcos can acquire spectrum at affordable rates.
Mittal also urged the Indian government to ensure adequate availability of 5G spectrum for telcos and at affordable prices. He also added that the country isn’t ready for advanced 5G use cases like robotics surgery and self-driving cars.
India’s Ministry of Defence currently holds spectrum in the 3300-3400 MHz band, while the Indian Space Research Organisation (ISRO) holds spectrum in the 3400-3425 MHz band. Thus, only 175 MHz spectrum is available for all four Indian telecom operators as against their demand for 300 MHz spectrum.
The Department of Telecommunications (DoT) has yet to set a definite timeline for the 5G spectrum auction. However, Reliance Industries Limited chairman Mukesh Ambani has already said that Jio will launch 5G by the second half of 2021.
Earlier this week, all three private telcos wrote to India’s telecom secretary Anshu Prakash to push the telecom regulator (TRAI) to quickly start a fresh consultation on including 26 GHz, 28 GHz and 37 GHz or mm wavebands in the upcoming 5G spectrum sale. Telcos want TRAI to give its recommendations around spectrum quantum and reserve prices.
Indian telcos, through their representative body, COAI, have already conveyed to the authorities that spectrum in the 26 GHz and 28 GHz bands are prime bands for rolling out 5G services in India. They want India to allocate at least 400 MHz of spectrum in these bands per operator.
These bands were identified globally for 5G by the International Telecom Union (ITU) in November 2019.
During his session at the virtual event, Mittal said India remains weak on the Artificial Intelligence (AI) front since the country doesn’t have adequate patents. “…China is racing ahead, which is why we need to invest much more in AI.”
He also said that the government’s push towards local manufacturing and the recently introduced production-linked incentive (PLI) policy for telecom gear could help boost India’s local manufacturing ambitions.
“Given the current geopolitical situation, especially where China stands in that context, there’s a real opportunity for India to raise the bar on the local manufacturing front in the digital space,” Mittal said.