High prices deterring telcos from bidding for 5G spectrum: Industry group

Topics Telcos | TRAI  | 5G spectrum

Adding to the growing chorus for lowering of Trai-recommended rates, industry body Cellular Operators' Association of India (COAI) on Tuesday said its member companies have indicated reluctance in picking up 5G spectrum in the upcoming government-organised sale of radiowaves, concerned over high prices and less-then-adequate quantum.

COAI Director-General Rajan Mathews said there could be some takers for 4G spectrum in the auctions, which the government hopes to conduct in the current financial year.

"In spectrum auctions, for sub-1GHz, it is possible that someone might want to pick up some spectrum for 4G but 5G pricing is still the main challenge. Our members have indicated that at the current prices, it does not make sense to invest this kind of money," Mathews told PTI.

On Monday, the Broadband India Forum (BIF) had claimed that radiowaves unsold in past auctions, because they were priced high, had an implication of Rs 5.4 trillion due to economic benefits lost, and that the government needs to ensure adequacy and "reasonable" rates for upcoming 5G auction.

Spectrum price in India is, by far, the most important factor in determining the fate of an auction, its success or failure, BIF had said, adding that prices should trigger maximum sale and, hence, optimal realisation of direct and indirect benefits, and not be driven by short-term financial gains.

The government in August-end invited bids for selection of agency that will conduct spectrum auctions in various bands, including 5G, -- setting the stage for mega sale of over 8000 MHz of radiowaves, at a start price of over Rs 5.7 trillion. The deadline for submission of the bids by prospective auctioneers is September 25.

But, the industry laments that the spectrum prices proposed in India are four times higher than other markets.

The Telecom Regulatory Authority of India (Trai), in July this year, refused to budge on its recommendation on base price and valuation of spectrum, dashing hopes of financially-stressed companies such as Bharti Airtel and Vodafone Idea which had desired a lower base price. Trai had made it clear to the telecom department that it has considered "all relevant factors" while giving views on prices.

COAI's Mathews contended that not only is the price tag of spectrum working out to be expensive for the telecom industry, even the quantum of 5G radiowaves being put on the block is inadequate for three private operators, given that such services and applications would require at least 100 MHz of spectrum for each player.

Against the 300 MHz that was originally intended to be made available, space and defence departments are likely to stake a claim on cumulative 125 MHz. In case the telecom department agrees to such claims, this could leave a paltry 175 MHz for all 5G aspirants.

The issues have been flagged by COAI to the telecom department in a recent meeting, Mathews said.



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