Indian telcos demand 95% reduction in 5G spectrum base prices

spectrum price reduction
Image by Ivan Burchak | Bigstockphoto

Indian telecom operators have called for a 95% reduction in the recommended base price of 5G spectrum in the 3.3-3.67 GHz mid-band in their submissions to Telecom Regulatory Authority of India (TRAI).

The telcos said that 5G deployment-related investments will be as high as Rs 50,000 crore ($6.76 billion) excluding spectrum costs – thus, reducing the spectrum base price will create “necessary financial headroom” for 5G rollouts.

Bharti Airtel urged the regulator to keep 5G spectrum prices no higher than 10% of the base price it recommended in 2018, which was around Rs 492 crore ($67.4 million) per MHz of unpaired spectrum on a pan-India basis. The price has been deemed too expensive by all three telcos.

Airtel said that providing meaningful 5G coverage will require around Rs 50,000 crore ($6.76 billion) per telco.

“To break even on a Rs 50,000 crore 5G investment, a telco would require over 20% revenue upside from current levels, and global industry data suggests even 10% incremental revenue, post a 5G services launch is a stretched assumption,” Airtel further added.

Airtel also proposed that spectrum in the 600-MHz band be given free of charge to operators with stringent rollout obligations, which would result in a much needed boost to rural broadband coverage.

TRAI – which in November started the critical process of setting starting prices of ten spectrum bands earmarked by the government for offering 5G services – recently informed the Department of Telecommunications (DoT) that it is pushing back its submission of 5G spectrum pricing recommendations to March. That delay may further push the 5G spectrum auction to July 2022.

Reliance Jio, in its submission to TRAI, proposed that the spectrum base price in the 28-GHz millimeter-wave band be kept at 1/100th of mid-band spectrum price, and also pushed TRAI to make 28-GHz spectrum fully available for 5G services – positions backed by Jio’s 4G gear partner, Samsung, as well as rival telco Vodafone Idea.

However, Bharti-backed satellite player OneWeb, as well as the Indian Space Association (ISpA), which represents the country’s satellite operators, warned that allocating spectrum in the 28-GHz band for 5G would “severely impair” satellite services by curtailing capacity available on existing satellites over India. The move will also discourage investments in the space sector, they said.

“Airwaves from 27.5 GHz and above should not be auctioned, at least not till the usage of other mmWave bands like 26 GHz has been substantiated and other 5G bands have been exhausted,” OneWeb said in its submission to the TRAI.

Jio pointed out in its submission that both the 26-GHz and 28-GHz bands are already being used by over 160 operators in 44 countries for 5G.

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