5G Trials and Spectrum Auction are Key Agendas for Telecom Ministry Under New Government

The new government will also face challenges since the telecom companies are still facing losses due to low tariffs on hyper-competition and huge spectrum dues though the market has improved

By May 23rd, 2019 AT 4:58 PM
Highlights
  • Telcos expected to receive spectrum for 5G trials next month
  • Next spectrum auction might take place at the start of 2020

Preparing the Cabinet note for spectrum auction, rolling out of the new digital communications policy and establishing regulatory sandboxes, 5G technology trials, policy on experimentation and trial spectrum for technologies in June, will top the agenda of the Union Telecom Ministry over the next three months once the new government takes over. With election results indicative of a return of the Modi government, the telecom ministry  has started getting its act together by working on the pending schedule of the last government which was on halt for the polls while awaiting a new government. This news was first reported by IANS.

Another area awaiting decisions are settling issues on merger and transfers of licenses of the mergers and acquisitions taken so far — such as Airtel-Telenor, Airtel-TTSL, Vodafone-Idea among others.

The Department of Telecom is also preparing a Cabinet note for spectrum auction for the new government. The much-awaited spectrum auction will finally happen in the second half of 2019 where a whopping 8,293.95 Mhz of telecom frequencies at an estimated total base price of Rs 5.77 lakh crore are expected to go under the hammer.

The new government will also face challenges since the telecom companies are still facing losses due to low tariffs on hyper-competition and huge spectrum dues though the market has improved.

Licence fee mop-up by the government in the December quarter rose 0.03% sequentially to Rs 2,890 crore, while spectrum usage charge (SUC) rose by 2% to Rs 1,064 crore, data from the Telecom Regulatory Authority of India (Trai) showed.

The industry’s blended monthly average revenue per user – a key performance metric – from wireless services increased over 4% sequentially to Rs 70.13 in the December quarter. The telecom sector’s Adjusted Gross Revenue shrank by a small 0.24% sequentially to Rs 36,054 crore in the December quarter, the Trai report said.

Still, the tariffs are low and telcos have huge debts and that makes it difficult for the government to anticipate what kind of response the spectrum auction will generate as India gears up to meet the 5G rollout globally in 2020.

The pressure on the government for some financial relief would also be put by the industry as they might seek deferment of spectrum dues period or cutting down of licence fees.

The most prominent among the plans are the task of issuing 5G network trial licenses to the telcos along with the spectrum and also preparing the Cabinet note for spectrum auction in November 2019.

The allocation will take place as soon as the new government takes charge, which could be in June, and depending on their readiness, the telcos could start the initial 5G run in the same month. The network trial licenses will be issued before that, said an official source.

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