After all that the government has done for the telcos in the recent months (announcement of relief measures, returning bank guarantees), the operators are looking for the Department of Telecommunications (DoT) to reduce the price of the 5G spectrum as well. The reserve price of multiple spectrum bands is expected to come down significantly.
The reason why telcos want the 5G spectrum to be more affordable is because they are very expensive when compared to the pricing in the global markets, and further, they don’t want to spend a lot of cash in the auctions to buy tiny amounts of spectrum. Already Airtel and Vodafone Idea (Vi) have a ton of debt, and even though its effect has been reduced with the government offering a moratorium on dues payments, the telcos won’t like more big dues on their shoulders.
Affordable Rollout of Networks Might Mean Affordable Services for Customers
While this is something that can’t be confirmed, it is likely that if the telcos can roll out the networks at a feasible cost, they will be motivated to offer services at reasonable prices to the customers.
But again, it all depends on the company providing the services and its strategies. One of the biggest reasons why the telcos want the network rollout costs to reduce is the low average revenue per user (ARPU). Low APRU doesn’t allow the telcos to recover costs and break even fast because their investments are very huge.
But the ARPU figures for the telcos should improve soon as all the private operators have moved ahead with prepaid tariff hikes. Most of the popular prepaid plans in the market are now expensive.
The 5G spectrum pricing will be recommended by the Telecom Regulatory Authority of India (TRAI). Post that, the spectrum auctions are likely to take place in April-June 2022 period. Hopefully, the telcos can get the spectrum at the right price so that the consumers don’t have to overpay at the end of the day.