There has been a lot of hustle-bustle in the telecom industry as of late, and the epicentre of all these issues seems to be the financially strained situation of the telecom operators. The industry which was once thriving like never before has come to a grim situation given the financial situation of the telecom companies which has worsened ever since the entry of the Mukesh Ambani led telecom operator, Reliance Jio. Another area which is going to be affected by this cash strapped situation of the companies is the rollout of the fifth-generation network technology since the telcos won’t be right away able to invest in the 5G spectrum. As per a new ET Telecom report, the implementation of the much-awaited 5G network will be pushed back by half a decade and is now likely to happen in 2025 because of reasons like exorbitant spectrum pricing, insufficient spectrum and unavailability of the newer bands.
COAI Opposed to High Pricing of Spectrum
A statement regarding this has also come from the Director-General of Cellular Operators Association of India (COAI), Rajan Matthews who has remarked that 5G would be pushed by five years and that is the perspective of the operators. As per the COAI head, in the rollout of 5G, firstly there was a pricing issue, and now a quantum issue has surfaced which is going to result in a delay of the implementation of the 5G services. It is worth noting that the association presents telecom operators such as Bharti Airtel, Vodafone Idea, Reliance Jio and other gear manufacturers like Cisco, Huawei and the others.
Telcos Consider Spectrum Exorbitantly Priced
As per COAI, the pricing which was first suggested by the Telecom Regulatory Authority of India (Trai) which is Rs 492 crore for 1 MHz was deemed to be too high looking at the situation of the industry. The telecom regulator had recommended that the airwaves be sold in blocks of 20 MHz meaning that 100 MHz of airwaves would set back the telecom operators by Rs 50,000 crore. In an industry which is already under a debt of Rs 7 lakh crore, this seems like a very detrimental figure for the telecom companies.
The recent Supreme Court verdict on the matter of Adjusted Gross Revenue (AGR) now including core services has put further strain on the industry. The industry, in total, now owes north of Rs 1.3 lakh crore for the Department of Telecommunications (DoT) over license and spectrum fee dues although a relief has been given in the name of payment moratorium of two years to the telecom operators.
Quantum Issue of 5G Spectrum
The incumbents have been long saying that the pricing of the spectrum suggested by the industry regulator has been too high and they have been asking for a review of these prices as well. However, there is a new issue at hand with the allocation of 5G airwaves for the telecom operators. While for a proper rollout of 5G each operator would require 100 MHz each, the government has already allocated 100 MHz to defence and another 25 MHz to space research. As such, there is only 175 MHz spectrum left for the telecom operators. As per Matthews of COAI, with this quantum of spectrum, there is no point of proceeding. The Director-General of the association has also said that privacy is another issue which will have to be discussed before the 5G rollout since a lot of data will be generated on the 5G network.
