Airtel, Vodafone Idea and Reliance Jio unlikely to bid for 5G spectrum

The country’s three leading telecom operators — Airtel, Vodafone Idea, and Reliance Jio — are unlikely to bid for 5G spectrum, citing high cost and limited availability of the airwaves, even as the Department of Telecommunications (DoT) floated on Monday a request for proposal (RFP) for the appointment of an auctioneer by October 15 to conduct the auction.  
Apart from the high base price fixed by the Telecom Regulatory Authority of India (Trai), telcos complain that enough spectrum is not available in the two bands identified in the RFP — 700 MHz and 3300-3600 MHz — because of competing claims from the defence, railways, and space departments. It is for the same reason that the DoT has been unable to offer the crucial 24.25-29.5 GHz band (also known as the millimetre band) — the airwaves that are key to providing capacity to handle growing data, as well as ensuring speeds multiple times higher than 4G.

Cellular Operators Association of India (COAI) Director General Rajan Matthew told Business Standard: “We have red-flagged to the DoT the issue of inadequate, clearly identifiable spectrum on offer, apart from the need to reduce the high base price, without which no telco is interested in bidding for 5G spectrum. Yet the issue has not been resolved. The problem is that adequate and clear spectrum is not available in either of the two bands identified for 5G and no one will buy if the competing demands for the same spectrum is not resolved. That is why even the millimetre band has not been included in the auction.”  

Matthew pointed out that in the 3300-3600 MHz band, only 275 MHz was being offered, which he said was inadequate for three operators. Even for basic 5G services, one would require at least 100 MHz of spectrum to start with, he added. 

He said now even defence had claimed another 100 MHz in this band for security reasons, as a result of which only 175 MHz would be available in each circle or less than 60 MHz each for the three players.

The other popular global band for 5G is the 24.25-29.5 GHZ. However, the COAI pointed out, here again the Department of Space had claimed 26 GHz for space and terrestrial operations, though, globally, it had been cleared for mobile services. As a result, it is not even being put up for bidding. 

In the 700 MHz band, which will be required by telcos to increase coverage of 5G, only 35 MHz is on offer in each circle. However, even here, the railways has laid claim to 10 MHz, which leaves only 25 MHZ for the three players. 

The three telcos say each of them will require at least 10 MHz in the band to support 5G, but if the railways’ demand is accepted, the remaining spectrum will be enough for only two operators. Experts also point out that without the millimetre band, 5G speeds would not be too different from 4G. 

They argue that speeds of even 4G in the country are a fifth of what it is available globally, primarily because of limited spectrum availability.

Communications Minister Ravi Shankar Prasad has given the deadline of 2019-end for the auction of 5G spectrum. 

However, the DoT still has to take a final call on the base prices of various spectrum, which the telcos have said are very high, but would fetch the government revenues of $70 billion.

Most telcos say they will rather bid for 4G spectrum, as in many circles, their networks are getting chocked because of the unprecedented increase in data usage. Both Airtel and Reliance Jio are expected to make a bid for such spectrum, say sources.  

Based on the calculations of Trai, it expects telcos to pay for 700 MHz and 3,300-3,600 MHz bands, more than what they had cumulatively paid for buying spectrum since 2010 in 2G, 3G, and 4G bands.

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