Experts advise govt to lower spectrum prices, increase airwaves for 5G push

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India might aspire to become a leader in 5G technology, but it does not even have one of the 150 trials going on currently across the world.

A steering committee on 5G recently submitted its report to the government, suggesting various measures to boost 5G uptake. According to the committee, the price of spectrum should be lowered and the quantum of airwaves increased. The government expects the commercial launch of 5G services in 2020.

The US plans to launch it a year earlier.

Asked about the future of 5G in the country, operators feel the 2020 timeline is achievable if the government auctions spectrum at reasonable prices. However, even then, it is not going to be a full-fledged launch across all the circles.

According to an industry watcher, 5G launch can be like 4G. He said although Bharti Airtel launched 4G services in Kolkata in 2012, taking it across the country took five-six years. Telecom operators are still rolling out 4G in various areas

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Regarding field trials, one of the operators said it could happen on spectrum lying unused in rural areas, but that might not give a clear idea about the network.

A field trial should ideally take place in a metropolitan city, but currently, all spectrum has been utilised for 4G. Sparing even a small amount for 5G trial is not possible.

“We have to wait for allocation of 5G spectrum to start trials in big cities,” said an executive with a telecom major.  

According to industry body Cellular Operators Association of India (COAI), the price of 5G spectrum was too high for the financially stressed industry. COAI Director General Rajan Mathews said the reserve price for proposed spectrum band for 5G services in 3,300-3,600 megahertz (MHz) frequency has been fixed at Rs 4.92 billion per MHz for a pan-Indian minimum block of 20 MHz (operators will have to shell out Rs 98.4 billion).

Going by global standards, the price of Rs 4.92 billion per MHz for 5G spectrum is on the higher side as the South Korean auctions happened just a month ago. The price there was Rs 1.3 billion per MHz.

Also, if an operator wants to offer full-scale 5G services, it needs to get around 100 MHz spectrum, in 3,300-3,600 MHz band, meaning the telco has to cough up around Rs 490 billion.

Getting huge amount of capital to fund spectrum buys is going to be a Herculean task for operators. Given the debt-laden balance sheets, banks are not likely to lend more money to them.

Mathews said Indian banks are not likely to offer capital to telecom operators for spectrum auctions, so they have to look at foreign banks and financial institutions to raise money.

The steering committee, headed by Stanford University professor A J Paulraj, too, feels that 5G-deployment strategy in India faces conflicting considerations.

“If we go for an early adoption, the equipment is likely to be more expensive and being early, it will also have glitches, needing costly maturing. On the other hand, early adoption will fast-track the country’s embrace of 5G’s benefits and increase opportunities to develop innovative use cases that support Indian needs. Balancing these conflicts needs study,” the committee said in its report.

It also said even after the entry of 5G into the Indian networks, the earlier generation mobile technologies — 2G, 3G, and 4G — will continue to remain in use and it may take 10 or more years to phase these out.

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