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According to a report by Fitch, TRAI might look to cut down the 5G spectrum base price, in order to encourage telcos to participate more in the spectrum auction.
5G Spectrum Base Price - An Old Problem
For the last two spectrum auctions now, the 700 MHz spectrum band has gone unsold. Even though the band has a novelty of being useful for both 4G and 5G, the telcos have just not bothered bidding for it. The base price of the band just makes it immediately unviable for the telcos to buy the band.
The telcos, and multiple industry bodies, have written, with a deliberate frequency, to the DoT to reduce the base price of the spectrum. However, since the DoT failed to do so, the telcos did not bid for the band.
However, Fitch Ratings has reported that TRAI might recommend a lower base price for the two bands that will definitely be available to the telcos for buying - the 700 MHz band and the 3.3-3.6 GHz mid-range band.
Both of these bands represent a crucial backhaul spectrum for 5G services.
However, that does not mean that anything for the timeline for the 5G rollout. According to Fitch, the 5G spectrum auction will take place in 2022, with commercial rollouts beginning in 2023.
5G in 2023?
There are a few reasons why all the signs point to a rollout in 2023.
First, the National Frequency Allocation Policy has not been decided yet. As such, the only frequency band decided for 5G has been the mid-band spectrum. However, the telco's, with the approval of 5G trials, have been allocated frequencies in mid-band, 700 MHz, and mmWave.
Second, the DoT has just started work on 5G; it has recently set up a committee on applications and monetization of 5G and 5Gi. DoT had also asked the TRAI for its recommendations. The DoT has also sought recommendations for terms of reference, and the size of the spectrum for the sale.
After it acknowledges the request, TRAI will seek additional details before it starts working on the recommendations. The sector regulator will conduct the consultation process before formulating its recommendations.
Since TRAI has received the reference from DoT, now it will conduct a four-week-long process, seeking views from the stakeholders after it floats a consultation paper. After this, TRAI will give 2 weeks for counter comments. Following the process, the sector regulator will then conduct open-house discussions before compiling the recommendations.
Under normal circumstances, the whole process takes about 4-6 months.
Third, the telcos have approached the DoT for a 5G trials extension. What’s more, the DoT might oblige and extend the trials till the end of the current fiscal. If we assume that everything will take a year, and then give the telcos two quarters to deploy, we are looking at a commercial 5G rollout in 2023-24.
Till then, let’s sit back and dream.