5G Spectrum Price Too High at the Moment for Trials: Report

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The Department of Telecommunications (DoT) will soon allocate 5G spectrum to the telcos for testing purposes. But the number of telcos that participate in buying the concerned spectrum for conducting trials is expected to be very small, given the spectrum pricing is very high. The Telecom Regulatory Authority of India (Trai) needs to look at the reserve price set for the 5G spectrum and lower it. The regulator has recommended a price of Rs 492 crore per MHz of 5G spectrum — more details on the story ahead.

Government’s Call Can Push Trai to Lower the Reserve Price

According to an ET Telecom report, a call from the government can push Trai to lower the reserve price of the 5G spectrum. That said, it is not a guarantee that the reserve prices will be lowered, but only speculation or ‘expectation’ at the moment.

In a report released on February 15, Deutsche Bank said that the Indian government cares more about maximising revenues from the spectrum sale rather than improving network quality. It is worth noting that the upcoming 4G auctions will contain 2300 MHz of spectrum worth Rs 3.92 lakh crore.

ICICI Securities, however, said that looking at the earnest money deposit (EMD) submitted by Jio (Rs 10,000 crore), Airtel (Rs 3,000 crore), and Vodafone Idea (Rs 475 crore) for the upcoming auctions, their potential payouts are capped at Rs 70,000 crore, Rs 21,000 crore, and Rs 3,300 crore.

The government will soon avail the 5G spectrum for the telcos to start testing; however, no fixed timeline for the same is given. Anshu Prakash, DoT’s secretary, said that the government plans to auction the 3300-3600 MHz spectrum within the next six months.

All the telcos except for Bharat Sanchar Nigam Limited (BSNL) have said that their networks are 5G ready and are waiting eagerly for the government to allow them to test 5G with the dedicated spectrum band.

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