YOU ARE AT:5GIndian operators urge government to reduce reserve price for 5G spectrum

Indian operators urge government to reduce reserve price for 5G spectrum

Indian telecom operators have submitted comments to the Telecom Regulatory Authority of India (Trai) asking the government to cut the reserve price for 5G spectrum, according to local press reports.

Operators are saying that the reserve price for the 5G spectrum needs to be cut down by more than 90% for the upcoming spectrum auction, with no upfront payment and a moratorium of 5-6 years.

In 2018, Trai had recommended a reserve price of INR 4.92 billion (currently $66.5 million) per megahertz for the 3.3-3.6 GHz band.

Vodafone Idea said the reserve price for frequencies in the 3.300-3.670 GHz band would have to be reduced by almost 90% compared to the previous reserve price of Rs 492 crore/Mhz for pan-India spectrum,. For the mmWave band (24.25 GHz to 28.5 GHz), the reserve price should not be more than 1% of the pricing for 3.300-3.670 GHz on a per megahertz basis, according to the report.

Meanwhile, rival operator Reliance Jio had submitted comments to Trai stating that the reserve price for mid-band spectrum should be reduced by around 95% for a pan-India 100-megahertz block and the reserve price of mmWave bands should be kept at 1% of the mid-band.  Bharti Airtel also said spectrum prices should at best be nominal and thus not be more than 10% of the prices recommended by the Indian government in 2018.

The operators have highlighted that Trai’s past valuation methods need to be revised due to the altered market realities including the health of industry and the telcos’ revenue generation ability.

Regarding the payment terms, Bharti Airtel and Vodafone Idea have suggested no upfront payment with a moratorium of six years while Reliance Jio has proposed a 10% upfront payment required to ensure telecom operators’ commitment, followed by a five-year moratorium in payments.

The government of India expects local operators to launch 5G service in some parts of the country by mid-August 2022, local newspaper Business Standard recently reported.

According to the report, a source with knowledge of the matter said that a limited 5G launch is possible by that date if the country’s Department of Telecommunications (DoT) provides clarity around available spectrum. The report also said the Indian telecom industry needs to be given an assurance that the reserve price for 5G spectrum would be reduced.

The Indian government is expected to award frequencies for the provision of 5G services in April or May 2022, the country’s Communications Minister Ashwini Vaishnaw recently said. Vaishnaw said that the Trai, which looks at the structure of auctions, is undergoing consultations on the matter.

He said that Trai will submit the final report about the 5G auction in February or March.  “Immediately after that, we will have the auctions,” he said.

According to previous reports, India plans to award bands such as 700 MHz, 800 MHz, 900 MHz, 1.8 GHz, 2.1 GHz, 2.3 GHz, 2.5 GHz and 3.3-3.6 GHz bands. Through the spectrum auction, operators will be also able to bid for spectrum in the millimeter-wave band.

Indian operators Reliance Jio Infocomm, Bharti Airtel and Vodafone Idea have recently received a six-month extension from the Department of Telecommunications (DoT) to conduct 5G trials. With this extension, the carriers will be able to carry out 5G trials until May next year. Initially, telcos had been authorized to test 5G technology until 26 November.

In May, the DoT had awarded 5G trial spectrum for six months in the 700 Mhz, 3.5 GHz and 26 GHz bands, paving the way for local carriers to partner and develop 5G use cases.

ABOUT AUTHOR

Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.

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