The department of telecommunications (DoT) is confident that commercial launch of 5G services in the country will happen by August. Telecom secretary K Rajaraman told FE that the Telecom Regulatory Authority of India (Trai) is expected to submit its recommendations on the reserve price and other related issues within the next 7-10 days, after which the DoT, will deliberate on it and come out with a timetable for the auctions.
“I will not be able to tell for sure, because till it lands on our table, the clock doesn’t start ticking. But we are ready in all respects,” the secretary said.
To a specific query if services can be launched by August, Rajaraman said, “I think so, because the way things are, I think we should be able to make it definitely”.
Earlier, the DoT had written to Trai, requesting it to submit the recommendations on the reserve price of spectrum for 5G auctions before March, as the Prime Minister’s Office (PMO) had expressed its desire for the initial launch of 5G by August 15.
The DoT has also informed Trai about availability of additional spectrum in 800 MHz, 900 MHz and 1800 MHz bands that can be incorporated for the upcoming auction. Trai is expected to cut the reserve price of 5G spectrum. The regulator had acknowledged in the consultation paper that in the past auctions, a huge chunk of airwaves remained unsold due to high reserve prices. The government is also in favour of reserve prices coming down as it had come out with a revival package for telecom operators last year in September and wants to further deepen the reforms through pricing correction so that 5G services take off in the country in a timely manner.
In case, Trai does not cut the reserve prices, the government will take a call on the matter.
It is expected that Trai is likely to reduce the reserve price of 5G spectrum by 30% to 50% as against the demand of a 90% cut. However, the spectrum cap may not be changed because of fears of some kind of monopoly emerging. Currently, the overall spectrum cap stands at 35%. Bharti Airtel and Vodafone Idea want the cap to stay but Reliance Jio has been demanding that it be increased to 50%.
Both the Trai and the government are being doubly careful this time as the spectrum demand-supply scenario has totally changed in the last few years, especially after the March, 2021 auctions. There are only three telecom players and one of them is financially weak. The operators have enough spectrum in the 4G band and by optimising it can start providing 5G services once the ecosystem is more developed. In fact, Bharti Airtel has demonstrated 5G services through such spectrum optimisation. As a result, if the pricing does not suit the industry, it will be in no hurry to buy 5G spectrum.
