Urging the government to charge affordable rates for 5G spectrum allocation, telecom service operator Airtel on Thursday said that a faster roll-out of the next-generation network can be much more beneficial than the collection of revenue in upfront cost.
"5G is important and that's why we keep on requesting the government to make the 5G as an enabler for hundreds of things that we develop in the country, to keep the spectrum at affordable pricing, to not load the industry too much," said Sunil Bharti Mittal, chairman of Bharti Enterprises, at a conclave.
He argued that instead of devoting money to spectrum acquisitions, service providers can invest in a faster rollout of the network, which will deliver high-speed connectivity with lower latency.
"I will say the multiplier impact that a faster, high-speed, low-latency network can have for a country is many times more than what can be achieved by picking up some money upfront," said Mittal.
In the past, telcos have complained about high reserve prices being a deterrent, and the high cost of the spectrum has been called out as one of the reasons why the telecom industry has been in a poor financial position for the last few years.
TRAI recommendation
The Telecom Regulatory Authority of India (TRAI) earlier this month recommended a 39% reduction in the reserve or floor price for the sale of spectrum for mobile services, including the latest 5G offering, as it looked to match revenue expectations with the industry's paying capacity.
The watchdog has recommended a mega auction plan of over ₹7.5 lakh crore for over 1 lakh megahertz spectrum in case government allocates it for a period of 30 years.
In case of 20 years, the total value of the proposed spectrum auction will stand at around ₹5.07 lakh crore at the reserve price.
For the prime 5G frequency of 3300-3670 MHz band, the all-India reserve price adds up to ₹317 crore per MHz, which is over 35% lower than the ₹492 crore/MHz suggested by Trai last time around.
With large swathes of spectrum remaining unsold in the last two auctions, Trai recommended to the government for selling airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and new slots of 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz.
Following this, some analysts said that the TRAI recommendations on cut in 5G spectrum base price are incrementally positive, not transformational.
The reduction proposed in pricing, though largely on expected lines, is not in sync with the 90% drop that the industry had been asking for, the experts said.
