Indian telecom operators may look at reviving their demand for lowering the 5G spectrum price in the country after a task force constituted by the country’s finance ministry found their claim to be valid, saying that the current price suggested by the Department of Telecoms (DoT) is too high.
Earlier this week, a task force constituted by the Department of Economic Affairs under the Ministry of Finance, India had submitted its final report on the National Infrastructure Pipeline, NIP for 2019-25.
In its report, the task force found that the DoT’s suggested base price of Rs 492 crore (US$650,000) per MHz was “very high compared with the base price in countries where 5G is already deployed.”
The demand for new spectrum is likely to be subdued as consolidation in India’s telecom market has reduced the number of telecom operators to effectively only four –Reliance Jio, Bharti Airtel, Vodafone Idea and BSNL. State-run MTNL offers services in just Mumbai and Delhi.
“…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.
It added that to enable Indian telecom operators’ participation in the upcoming 5G auction, the government “should rationalize all elements of spectrum pricing for the auction, including base price, period of payment of charges and interest rates.”
India’s telecom department (DoT) had fixed 5G spectrum price last year based on sector regulator, Trai’s recommendations in August 2018. The Trai had suggested that Rs 492 crore should be the base price for per MHz of 3,300-3,600 MHz band, that would be used for providing 5G services in India.
Telecom operators like Bharti Airtel and Vodafone Idea have already conveyed to the government their inability to bid for the 5G spectrum if the government moves ahead with the current base price.
Gopal Vittal, Airtel’s CEO, during the earnings, call on 5 February this year, had told analysts that it could not afford to pay Rs 50,000 crore for 100 Mhz of spectrum in the 3.5Ghz band. “…we believe it’s too high-priced. So we will not pick it up at those prices.”
Telcos have said that 5G service requires a minimum of 100 Mhz spectrum in the 3.5 GHz band for each operator.
The Indian government was planning to put a total of 8,300 MHz of spectrum across the various bands for auction in June this year. However, due to the ongoing Covid-19 pandemic-induced lockdown in India and the financial situation of telcos, auctions are likely to be pushed to the October-December quarter.
The lockdown has also delayed 5G field trials in India, which were scheduled to start in March this year. Vodafone Idea, Airtel and Reliance Jio had submitted their applications with Ericsson, Nokia, Huawei, ZTE, and Samsung for these trials. BSNL had submitted its application with only ZTE.