5G Spectrum Prices in India: TRAI Said to Be Unlikely to Review Base Price

The Digitial Communications Commission (DCC) in its last meeting on June 13 decided to refer the spectrum proposals back to the regulator for a review and clarification on many aspects, including a relook at the base price.

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5G Spectrum Prices in India: TRAI Said to Be Unlikely to Review Base Price
Highlights
  • 5G spectrum prices will most likely not be reviewed by TRAI
  • DCC had asked TRAI to relook the prices, along with other aspects
  • Telecom sector is under financial stress and prices are too high to bid

The Telecom Regulatory Authority of India (TRAI) may not go ahead with any reduction in 5G spectrum prices although the Digital Communication Commission had decided to ask the regulator to review the prices.

Sources in TRAI said that a holistic view should be taken on the pricing of 5G spectrum and the prospective business opportunities it offers, which it has done in its current spectrum recommendations, thereby indicating that there may not be much scope for any further revision of price from its side.

The Digitial Communications Commission (DCC) in its last meeting on June 13 decided to refer the spectrum proposals back to the regulator for a review and clarification on many aspects, including a relook at the base price.

The sector is under financial stress and operators find the prices are too high to bid and are globally uncompetitive as in the 5G spectrum auction in South Korea.

However no concrete decision has so far been taken by the regulator.

"The prices were decided after consulting with all the stakeholders, so there does not come up any question of a reduction," a TRAI official told IANS.

Another official with the regulator said that 5G will give new business opportunities to the telecom operators and that its utilisation will be much more different from the the earlier generations of telecom spectrum.

On comparisons with the South Korean 5G auction prices, the official said, "There is a talk of Korean 5G auction prices being lower than India, but while comparing prices we have to compare terms and conditions. TRAI has for the last two decades recommended the licensing framework and spectrum price. In Korea it is for 10 years... We have to look at the discovered prices globally and also we have to see how many people are going to use the services."

As per the TRAI-mandated pricing levels, an operator would need to pay at least Rs 9,840 crore to buy 5G spectrum on a pan-India basis as the regulator has suggested it "should be put to auction in the block size of 20 MHz".

In August, Trai had said the 3,300-3,600 MHz band, expected to be the primary band for 5G services, should be auctioned as a single band and in blocks of 20MHz each at Rs 492 crore per megahertz.

While Bharti Airtel has said these prices are exorbitant and that it would not participate in an auction held at these prices, Vodafone Idea has suggested that the 5G auction should take place in 2020.

In South Korea, the same band was priced at roughly Rs 131 crore per MHz in auctions held in June last year.

According to the Cellular Operators' Association of India (COAI) the price of 5G spectrum in India is 30-40 per cent higher than global rates.

"Majority of our operators have indicated that 5G spectrum is far too prohibitively expensive and that their balance sheets can't afford this," COAI Director General, Rajan Mathews said.

TRAI has already recommended auction of about 8,644 MHz of telecom frequencies, including those for 5G services, at an estimated total base price of Rs 4.9 lakh crore, but the financially stressed industry has contended that prices are unaffordable.

The regulator has also been asked to offer suggestions on the pattern of deployment, eligibility criteria and method of payment for spectrum.

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