Indian Telcos Might Skip 5G Spectrum Auction if the Prices Are Too High: Fitch

The National Digital Communications Policy (NDCP) 2018 which was approved by Union Cabinet a couple of days ago is said to help companies serve the growing data needs for consumers, cut the costs and at the same time, reduce red tape. Private telecom companies’ growth will be supported as the NDCP focuses to expand broadband coverage funded by the universal service obligation fund and in partnership with private telcos, global ratings major Fitch said in the report. The NDCP 2018 is aiming to attract USB 100 billion investment and create 40 lakh jobs in the sector by 2022. In the report, the rating firm also added that telcos might skip 5G spectrum auction if the prices are too high.

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It explained that this would be possible through the broadening of the customer base and improvement of Internet adoption, particularly in rural areas. NDCP’s plan to encourage more efficient spectrum usage will also help private telcos by making available harmonised and contiguous spectrum bands and further liberalising spectrum sharing and trading, it said.

The agency said implementing proposals like connecting six lakh villages to the broadband network, establishing two million Wi-Fi hotspots in rural areas and one million in urban areas, will be a challenge. Accelerated 5G deployment will encourage companies to increase investment in the 5G spectrum which, depending on the 5G spectrum asset price, may further stretch already heavily indebted balance sheets over the next two years, it warned.

However, the agency was quick to add that private telcos may also skip 5G spectrum auctions if the prices are “too high”. On the positive side, the report said NDCP’s plans to review and rationalise the sector’s tax structure and optimise future spectrum asset pricing can cut telcos’ costs and the red tape.

The agency said at present the telcos face a lot of pressure on taxes through licence fees, spectrum usage charges and universal service fees on top of expensive spectrum assets, while the litigation is also high.

In what can come as a relief for the sector, which has been impacted since the launch of the deep-pocketed and aggressive new entrant Reliance Jio, the agency said the emergence of three large operators would eventually ease price competition.

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11 Comments on "Indian Telcos Might Skip 5G Spectrum Auction if the Prices Are Too High: Fitch"

 

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Vishal | Chennai
September 29, 2018 2:29 pm 2:29 PM

Atleast they should participate in 4G spectrum auction

Nikhil Mumbai-Pune
September 29, 2018 11:01 pm 11:01 PM

They will obviously. Jio is in big mess. Only operator isn’t in mess is Airtel(Overall).

Vishal | Chennai
September 30, 2018 12:07 pm 12:07 PM

+1 Jio needs spectrum .. Airtel has good spectrum in most of the states for eg in Karnataka band 3,40 and soon band 8 to be refarmed for 4G. And if they shut down 3G another 10mhz in band 1 will be used for 4G

Nikhil Mumbai-Pune
September 30, 2018 9:22 pm 9:22 PM

Whatever you have said is going to be good in long term. If they are doing 900Mix without shutting 3G then they are going to loose the customers in short term in my honest opinion. For Avoid to match Jio, they need to shut down 3G first and refarm it to 4G and then refarm 4G on 900Mhz. If this doesn’t happen then it’s gone.

Nikhil Mumbai-Pune
September 30, 2018 9:21 pm 9:21 PM
Because there are no users on Airtel. Thats why it seems to be enoygh. Jio is having whole load of data in India. Very few people using Airtel for data purposes overall.Mostly are corporate data plans which are using data in avoid. This is my honest opinion. I hope Jio gallops all the 20Mhz in band 40 in upcoming auction. All they should try to get whole band 5 spectrum from Airtel. They should buy out Aircel spectrum and then buy band 1 spectrum as well. This is the only way for Jio right now. There is no other way… Read more »
Sachin
September 29, 2018 1:03 pm 1:03 PM

TRAI’s 5G auction will be a classic story of killing a hen that lays a golden egg.

Kaushik IMA
September 29, 2018 12:00 pm 12:00 PM
Update: Airtel MPCG is big mess. Every day in evening peak hours, calls to Jio numbers will fail with the message that “all lines on this route are busy”. The speeds are all over the place, voice quality even over VoLTE is worse than Idea 3G. I remember the voice quality used to be good. What changed? Now there’s VoLTE and CA + MIMO everywhere but this network is hardly a flagship experience. People are using this network due to lack of options, but now I truly feel the only real option is Jio as plan wise and network quality… Read more »
superd
September 30, 2018 12:05 pm 12:05 PM

Even thou i have to use it, because JIO is giving 50-60KB/s(approx) all the time, even in non peak hours, whereas airtel giving constant 2.5MB/s in IDM even in peak hrs in GWALIOR

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