The Department of Telecommunications (DoT) is likely to ask the Telecom Regulatory Authority of India (Trai) to reconsider the reserve price for auction of 5G spectrum as the industry has expressed its inability to buy airwaves at such high costs. For the 5G band in the 3300-3600 Mhz, the Trai has recommended a reserve price of Rs 492 crore per Mhz, for a pan India minimum block of 20 Mhz, which means operators will have to shell out Rs 9,840 crore, which is seen as steep.
Going by global standards the price of Rs 492 crore per Mhz for 5G spectrum is on the higher side as the South Korean auctions which was happened just a month back had the price at Rs 130 crore per Mhz.
According to sources, there is a view among DoT officials that 5G pricing should be re-looked. Also, telecom operators through meetings with DoT officials have conveyed that they can’t buy spectrum at such high prices. Industry associations including Cellular Operators Association of India (COAI) and Broadband India Forum (BIF) have also written to DoT to reconsider the pricing.
“We agree that the proposed 5G price is very high and it requires to be relooked. We may ask the regulator to reconsider the pricing. However, it may happen after the elections are over,” said a DoT official.
Another official added that if the government goes for auction with the current reserve prices, it may be a possibility that there won’t be many takers for the spectrum. “If only one operator comes forward to buy spectrum, it won’t help in determining the market price of airwaves and the auction will have to be conducted again,” the official said.
According to BIF president TV Ramachandran, for a pan-India minimum block of 20 MHz, operators will have to shell out nearly Rs 10,000 crore, which is exorbitant considering other countries’ values as well as the low average revenue per user (ARPU) in India.
Bharti Enterprises chairman Sunil Bharti Mittal had also recently stated that the current pricing of 5G airwaves was unacceptable. “DoT can keep on auctioning, they have had two failed auctions and do they want to have five more failed auctions, it’s upto them. Spectrum is required, spectrum will be bought, India will get into 5G but the only thing that will stand in the way is right pricing for spectrum,” he had said.
Not only the industry, even a committee on 5G formed by DoT, had asked the 5G price to be lowered. A steering committee on 5G, headed by Stanford University Professor A J Paulraj, last year recommended to increase the quantum of spectrum and lower the pricing. “…in recent years, the high cost of spectrum has left large quantities of unsold spectrum. It is important that India correct these anomalies in 5G,” the committee said in its report.
