High 5G spectrum prices may push players up against the wall: COAI DG

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NEW DELHI: Apex telecom industry body COAI has asserted that spectrum pricing should be kept conducive to market conditions as 5G entails upfront capital investments with monetisation spread over a long-haul, and pricing radiowaves high will only push the players up against the wall.
The stage is set for Telecom Regulatory Authority of India (TRAI) to come out with its recommendations on 5G spectrum pricing and other modalities for upcoming auctions, and the announcement from the sector watchdog is expected anytime now.
Norms will also be worked out for new frequencies such as 526-698 MHz and millimetre band, that is 24.25 – 28.5 GHz, in addition to bands such as 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz.
The auction can be conducted within 2-2.5 months of regulator coming out with spectrum recommendations, which would put the mega-event in the ballpark of June timeframe, a telecom department source said.
The industry has been aggressively pitching for a drastic 80-90 per cent cut in prices of spectrum for next-generation services, which will usher in ultra high-speeds and spawn new-age services and business models.
Advocating lower prices for spectrum, COAI Director General, SP Kochhar told PTI: “5G does not have any use cases which can be monetised in a quarter, so it is going to be a long-haul. At the same time, the capital investments have to be made in a particular period of time.”
It is pertinent to mention here that last time around, TRAI had suggested Rs 492 crore per MHz for spectrum in prime 5G band of 3300-3600 MHz, which meant that a mobile operator going for 100 MHz needed to shell out a whopping Rs 49,200 crore for all-India spectrum.
However, frequencies in this band were not put up for auction in the previous round, as the frequency range could not be vacated in time and the base price of the radiowaves in the spectrum band was seen to be very expensive for 5G services.
In March 2021, the government went ahead with auction of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands. A total of 2,308.80 MHz spectrum worth Rs 4 lakh crore at reserve price in different bands were put on the block, of which 855.60 MHz quantum was sold in the auction, resulting in total winning bids worth Rs 77,820.81 crore. No bids were received in 700 MHz and 2500 MHz bands.
Kochhar said that pegging the prices high this time around would push the telcos in a difficult situation, to say the least.
“If telcos have to pay high price for spectrum, their back will be to the wall…,” Kochhar said.
Cellular Operators’ Association of India (COAI’s) members include Reliance Jio, Bharti Airtel and Vodafone Idea.
According to Kochhar, the benefits that would accrue to industries across-the-board with advent of 5G, would far outweigh the realisations from spectrum auctions, per se.
And while 5G will see consumer and enterprise applications, the uptake on consumer side will be a whole lot faster.
“Government must not miss the woods for the trees and therefore they must see it (auction, pricing) in its entirety, in the long-term. They must go for spectrum pricing that is conducive to the market conditions…as per our discussions with our members, it should be reduced by 80-90 per cent on all bands,” Kochhar said.
Telecom regulator, TRAI, in November-end last year, had released a detailed consultation paper to discuss threadbare the modalities for auction of spectrum across multiple bands, including pricing, quantum and other conditions — preparing the groundwork for upcoming 5G auctions.
The spectrum auctions are slated to be conducted in 2022, to facilitate the rollout of 5G mobile services within 2022-23, by private telecom providers.
TRAI’s recommendations will touch on crucial aspects like valuation and reserve price of spectrum, including 5G, quantum of spectrum, block size, eligibility conditions for participation in auction, rollout obligations, spectrum cap, and surrender of spectrum.
Telecom service providers are conducting 5G trials in Delhi, Mumbai, Jamnagar, Ahmedabad, Kolkata, Chennai, Hyderabad, Bengaluru, Lucknow, Gurgugram, Gandhinagar, Chandigarh, Pune and Varanasi including urban, semi-urban and rural areas.

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