India rules out reduction in 5G spectrum price

India government on Wednesday ruled out plans to reduce prices of 5G spectrum during the upcoming auction.
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Telecom industry bodies and telecom operators have been demanding a downward revision in the proposed base price for 5G spectrum auction.

Fitch Ratings last week said Indian telecom operators are unlikely to participate during the 5G spectrum auction due to poor financial conditions.

In the India region, LTE subscriptions are forecast to increase by 150 million during 2019 and pass GSM/EDGE as the dominant technology, according to the latest mobility report from Ericsson.

LTE is forecast to represent 80 percent of mobile subscriptions by the end of 2025. 5G subscriptions are expected to become available in 2022 and will represent 11 percent of mobile subscriptions at the end of 2025.

The mass-market adoption of advanced use cases fuelled by 5G is expected later in India than in other regions.

India’s telecom minister Ravi Shankar Prasad informed the Lok Sabha that the base price for the next round of spectrum auction has been recommended by the Telecom Regulatory Authority of India (TRAI) on August 1, 2018, and the regulator reaffirmed the same price on July 8, 2019 in response to reference sent by the Department of Telecom.

In response to member Dushyant Singh’s question that if the government was planning to reduce the base-price for 5G spectrum, Prasad said, “No, Sir”.

The telecom minister while speaking at the India Mobile Congress 2019 last month had said that the spectrum auctions will be done this financial year and “undertaking some reforms in spectrum pricing as well.”

The industry bodies and telecom operators have pointed out that the 5G spectrum price recommended by the Trai for next round of auction is too high. The government has huge amount of unsold spectrum due to lack of their demand in earlier auctions, PTI reported.

The value of unsold spectrum as on date as per valuation by Trai in its recommendations on Auction of Spectrum in 700 MHz, 800MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz, 3400-3600MHz Bands dated August 1, 2018 is Rs 4.9 lakh crore.

A telecom player interested in buying spectrum for 5G service in 3300-3400 MHz and 3425-3600 MHz band will need to shell out at least Rs 9,840 crore as per Trai’s proposal.

The minister in response to Singh’s question on availability of spectrum for 5G services shared that 275 megahertz of radiowaves frequency between 3,300-3,400 MHz and 3,425 to 3,600 MHz band is available for 5G auction which is enough to launch 5G services in the country.

Industry body Broadband India Forum (BIF), however, has said that quantum of frequency proposed is insufficient to start the next generation mobile services, Prasad said.

“BIF have, in their representation to the government, stated that the quantum of 5G spectrum that has been allocated for the upcoming 5G spectrum auction is not enough for a country of India’s size and density. In DoT’s view, the present available spectrum is enough to start the 5G services,” Prasad said.

The DoT has set a target to roll out 5G in 2020. Swedish telecom gear maker Ericsson in its global study published early this week said that 5G connections are likely to be available in India from 2022.

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