India’s telecom regulator TRAI has set the ball rolling for the next round of spectrum auctions by recommending a reduction in the base price of mid-band 5G spectrum by nearly 36% – but that’s still not enough, say the Cellular Operators Association of India (COAI), which blasted just about every provision as a step backwards.
In its 436-page recommendations issued on Monday, TRAI also recommended reducing the base price of the coveted 700 MHz band by 40%. The regulator also recommended new base prices for spectrum in bands like the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands that are currently being used for 4G services. All of these bands can be used to offer 5G services in the future.
TRAI also identified the piercing of new bands in the 600 MHz band and mmWave bands at 24.25-28.5 GHz.
COAI, which represents Reliance Jio, Bharti Airtel and Vodafone Idea, expressed disappointment over the pricing recommendations.
“Given the recent seminal reforms for the telecom sector announced by the Government of India, these recommendations are one step backwards,” COAI said in a media statement. “The spectrum pricing recommended by TRAI is too high.”
COAI said that throughout the consultation process, the industry had presented extensive arguments – based on global research and benchmarks – for reducing spectrum prices as much as 90%. “To see only about 35-40% reduction recommended in prices, therefore is deeply disappointing,” it added.
Private telcos also complained that despite the government’s decision to allocate 5G spectrum for a period of 30 years, TRAI has decided to recommend reserve prices for 20 years. Bids for 30 years will see the base price multiplied 1.5 times.
“If one were to look at the pan-India price of 3.5 GHz spectrum, then we are back to square one with effectively no change and will nullify the relief provided by the union cabinet in the year 2021,” COAI said.
Meanwhile, TRAI also recommended mandatory rollout obligations for 5G networks. COAI said these recommendations didn’t factor in the huge cost of such rollouts, and the regulator has “delinked itself from reality and is running counter to the Government’s efforts of enhancing ease of doing business.”
“It’s best to let the service providers be the judge for rollout of networks based on market dynamics. No operator invests in large quantum of spectrum and network capex and opex without a clear monetization roadmap, and the companies are answerable to their investors and stakeholders,” the statement said.
TRAI’s 5G recommendations also allow enterprises to acquire 5G spectrum to deploy their own private networks. COAI says such a move will dramatically alter the industry dynamics and hurt the financial health of the industry rather than improving it because enterprise services constitute 30-40% of the industry’s overall revenues.
COAI has asked TRAI to revisit its spectrum pricing recommendations, saying that “there is enough and more headroom available to reduce spectrum prices by 90%, in line with global norms”.
According to reports, the long-awaited 5G spectrum auction is now expected to be held in 45-60 days. The auction is being touted to be the largest ever with over 104,000 MHz of spectrum up for grabs. The Indian government reportedly wants initial 5G rollouts to happen by August 15, India’s independence day.