Indian antitrust watchdog, affordable 5G spectrum crucial for competition

Mavenir says 5G spectrum India
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India’s antitrust watchdog said 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. It said that India’s telecom sector’s current financial health as a whole could result in an uneven speed of adoption of 5G by operators. 

“…the more profitable ones are likely to be faster off the block. In case this scenario unfolds, it will have implications for the level of competition in the long-run,” the Competition Commission of India (CCI) said in its report.

The CCI said that creating a competitive market for 5G will be crucial to India’s success. “This will imply ensuring assignment of the spectrum at a reasonable cost balancing revenue realisation and industry viability,” it said, adding that this will ensure that the capital market remains interested in funding network up-gradation and expansion, including the acquisition of spectrum. 

The watchdog found the quantum of the spectrum will also determine the quality of 5G offering. “…scarcity increases costs and makes operations inefficient.”

In its report, the CCI underlined the need for greater harmonisation across the CCI’s respective jurisdictions, the Telecom Regulatory Authority of India (Trai), the Department of Telecommunications (DoT) and the future Data Protection Authority.

“Going forward, formal and informal lines of communication between DoT, TRAI, CCI and the envisaged Data Protection Authority will be important to ensure that regulatory decisions are robust and consistent…there could be potential abuse of dominance cases, which might also involve a breach of data protection rules,” the antitrust watchdog said. 

India has yet to allow telecom operators and gear vendors to start 5G field trials having received multiple applications in the last year. It hasn’t revealed any timeline for the 5G spectrum auction, but it is expected to take place sometime in next fiscal. 

Currently, India only has 175 MHz spectrum available for 5G services with a cap of 50 MHz per telecom operator. India has four telecom operators, which means all players may not be able to get even 50MHz.

Indian telecom operators had sought at least 80 MHz of spectrum in the mid-band, which the government identified for 5G services in the first phase of the rollout. Industry analysts said that ideally, every telecom operator must get a block of 100 MHz spectrum to build an efficient 5G network in line with global 5G networks.

Reliance Jio, the only profit-making telco in India, aims to launch 5G in 2021 and has been pushing India for an early 5G auction. Jio has already developed its end-to-end 5G stack, including radio and core, and is currently developing 5G massive mimo and indoor small cells.

On the other hand, Bharti Airtel said that it would not buy 5G spectrum at the recommended rates. The Sunil Mittal-led telco and Vodafone Idea recently urged India to lower the reserve price for 5G spectrum so that they could invest in networks and price the services affordably.

In its report, the watchdog said that high costs of spectrum acquisition and the demands of network up-gradation increased the industry debt burden.

“Technological disruption and tariff competition triggered by the entry of Reliance Jio jointly aggravated the financial distress reflected in the unprecedented decline in revenue of the industry through the years 2017 and 2019,” it said.

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