The Indian government will have to be very careful with its decision of pricing the 5G spectrum in the upcoming auctions. In the previous auctions, every operator had avoided purchasing the 700 MHz airwaves due to steep pricing. Until now, the government has looked at the spectrum auctions as a source of revenue. But that’s not the right way, of course, as cheaper airwaves would allow the telcos to get more airwaves which in turn would help India in becoming a better digitally connected country.
If the telcos feel like the spectrum is too expensive this time around as well, they will not buy it. In the past, Airtel had said that it would go ahead with the 4G spectrum and, using dynamic spectrum sharing (DSS) technology, it would offer 5G services to Indians. The telco has also demonstrated that it can do that via a trial in Hyderabad in early 2021.
How Much Price Cut do Telcos Want in Spectrum?
As per the recommendations that were submitted to the Telecom Regulatory Authority of India (TRAI), the telcos want a 90% price cut in 5G airwaves. Further, the telcos have also demanded easier payment terms with no upfront payment and a moratorium of five to six years.
The telcos said that the mid-band spectrum in the 3300-3670 MHz band should get a price cut of 90% from the earlier evaluated price of Rs 492 crore/MHz for PAN-India. The industry has even called for affordable pricing for the mmWave (millimetre wavelength) bands for 5G services.
As for the E-band spectrum, which is to be used for backhaul services, the government might go with the administrative allocation route. The government is not expected to go with the spectrum auction for giving the E-band spectrum to the telcos, which will be very crucial for backhaul with 5G. Instead, the telcos might get it for a nominal fee from the government.
