COAI writes to the Govt., asks for 60-70% reduction in 5G spectrum prices

The COAI, or the Cellular Operators Association of India, which represents the three private telcos, along with many gear makers, had written to the government a week ago regarding the 5G spectrum prices.

5G Spectrum Prices still too high

An executive at one of the telcos said, "the telcos via COAI have said that unless airwaves prices are not dropped by 60-70%, then 5G auctions won't be successful. The three telcos will participate better if prices are lowered".

Right now, the government has only revealed the base price of the mid-band spectrum; at Rs. 492 crore for a unit, the price remains too steep. Notably, the spectrum in India is also the most expensive in the world. Recently concluded 5G auctions in countries such as Brazil and Belgium have seen far lower 5G spectrum prices.

Incidentally, in an analyst call recently, Vi's MD Ravinder Takkar had also echoed the same. He had said that if the government does not bring the prices down, no one will buy airwaves.

The government has not yet finalized a National Frequency Allocation Policy, and the DoT has been working on it. However, without it, the telcos have been uncertain; no one knows if the spectrum they are running 5G trials on will be available for sale or not. Right now, the only certainty to be had is with the mid-band spectrum; and it is certainly too expensive.

On their part, the DoT had asked TRAI for a recommendation on base prices; TRAI had replied with a request to inform on the bands available, their use, and quantum available. TRAI, once it receives the information, will bring out a consultation paper. Till then, the telcos continue to run 5G trials on mid-band, sub-1GHz band, and mmWave spectrum. Sources have reported that TRAI will take till March to finalize the base prices, which will need Cabinet’s approval.

5G Spectrum Sale When?

The government has been gunning for a 5G spectrum sale in April-May next year. It had been pushing for an earlier date, however, the telcos requested an extension in 5G trials.

The telcos have a couple more issues with the way DoT plans to conduct auctions. The telecom department has been considering a staggered spectrum auction, going with the mid-band spectrum first, and then selling other spectra in subsequent auctions. For now, the telcos have asked the government to auction all available spectrum bands simultaneously, to better plan the 5G rollout. The mmWave band remains another difficult issue to sort out, with no consensus between the telcos and the satcom operators.

All things considered, it looks likely that the government will go through with it in April-May, whether the telcos like the price or not. The government has set Independence Day, 2022 as the deadline for the 5G rollout in key circles, therefore it will have to get the spectrum sale out of the way.