Telecom operator Bharti Airtel reaffirmed that it would not purchase 5G spectrum at the Trai recommended prices. Trai suggested Rs 492 crore per megahertz, but Airtel feels the prices are on the steeper side. Not only Bharti Airtel, but even Vodafone Idea also said the prices are on the higher side. But Trai is also standing on its word saying the prices of 5G spectrum will not be reduced and operators should purchase them at the recommended prices only. Bharti Airtel was recently hit by Rs 35,000 crore AGR dues which again took its overall debt to over Rs 1 lakh crore in the country. At this point, the company doesn’t want to purchase the 5G spectrum and the telco is even urging for more tariff hikes so that the ARPU can go past Rs 200 in no time.
Airtel Believes the Trai 5G Spectrum Recommended Prices are Too High
During the Earnings Call on Wednesday, Gopal Vittal, Bharti Airtel MD and CEO for India and South Asia region, said the 5G spectrum prices recommended by Trai are too high. “On the 3.5 Ghz band, Trai has recommended price to Rs 50,000 crore for 100 MHz of spectrum. 5G requires a large block of the spectrum. 100 Mhz spectrum for Rs 50,000 crore, we can’t afford. We believe it is too high. We will not pick it up at those prices,” he said, according to a PTI report.
Talks regarding 5G spectrum prices are going on for a while now in the industry and Trai is not budging in reducing the recommended prices. This essentially means the 5G rollout in India will be delayed like how it happened with 4G in the early 2010s.
In addition to Gopal Vittal, Chief Financial Officer of Bharti Airtel, Badal Bagri said that the industry is now repairing itself with a hike in tariffs. Bharti Airtel is also hinting at another tariff hike to increase the ARPU. If Airtel increases the prices, Vodafone Idea and Reliance Jio will also follow the same. “We have ARPU of Rs 135. In the end state, I think we need to see ARPU of Rs 300 in Indian telecom. I think that is when we will turn a reasonable return of capital on the overall business,” Vittal further added.
Telcos Might Have to Shell Out Rs 9,840 Crore on 5G Spectrum
Going by the Trai recommended prices, telecom operators in India will have to put a minimum of Rs 9,840 crore on the pan-India basis to purchase the 5G spectrum in 3,300-3,600 Mhz band. While there’s no timeline on when 5G will be launched in India, the DoT is currently in the process of allocating 5G spectrum required for running trials. Telcos were asked to come up with entire 5G trial plan, but they sought an extension even for that as well.