5G Airwaves Too Expensive, DoT May Go After Trai for Price Reduction

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The pricing of 5G airwaves has been termed as ‘unaffordable’ by telcos in the past. To ensure a smooth 5G roll out across the nation, the floor prices set by the Telecom Regulatory Authority of India (Trai) need to be reduced. According to a Livemint report, the Department of Telecommunications (DoT) is likely to have a chat about the same with the regulator.

In the recently concluded spectrum auctions for 4G airwaves, the 700 MHz spectrum saw no interest from any of the telcos. Even though it is considered important for providing 5G services, none of the telcos bid for it due to its exorbitant pricing.

Reserve Price For 5G Spectrum

The reserve price for the 5G spectrum is set at Rs 492 crore per MHz of spectrum in the 3300-3600 MHz band by the regulator. Since the telcos will have to purchase blocks of the airwaves, it will become too steep for them to pay for acquiring the concerned airwaves.

At a time like this, Vodafone Idea (Vi), who is still in a major recovery mode, will not be able to pay for the spectrum. Even Bharti Airtel believes that the 5G spectrum pricing is not fair. The telcos also need to pay adjusted gross revenue (AGR) dues to the centre, which doesn’t give them a lot of room to spend huge sums of money on the spectrum.

Further, along with the 700 MHz band, even the 2500 MHz band remained unsold in the spectrum auctions. DoT might soon have a chat with Trai about the pricing of the airwaves. But at the end of the day, it is Trai that decides the spectrum pricing, DoT can only recommend.

The Cellular Operators Association of India (COAI) had also observed that the spectrum being availed for the Indian telcos is at least 4 to 6 times higher than what the other countries offer to their operators.

The regulator seriously needs to reconsider the pricing of the spectrum and allow some relief to the telcos.

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