TRAI unlikely to revise spectrum base price

While the industry has been demanding lower floor prices, TRAI’s decision to hold its fort may delay the launch of commercial 5G services in India

By Hemant Kashyap

India’s dream for an early 5G rollout may be in for some stormy weather with the telecom service providers and the regulator – Telecom Regulatory Authority of India (TRAI) – not seeing eye to eye on the reserve price of spectrum in the mid-band earmarked for the new standard.

According to reports, the regulatory authority is unlikely to change the existing reserve price of spectrum, a decision that may translate again into a low turnout at the 5G spectrum auction. It may, however, consider newer bands such as the millimeter wave (mmWave) band with a reasonable price to drive economic benefits.

Reports also indicated that TRAI might put at least 1 GHz of the spectrum on sale, allowing telcos to drive countrywide 5G deployment. The sector regulator has already been busy conducting in-house studies to arrive at a suitable base price and quantum for the spectrum.

Telcos led by the Cellular Operators Association (COAI) have been asking the Department of Telecommunications (DoT) to seek reserve prices from TRAI for multiple frequencies. These bands, being used for field 5G trials, including the mmWave band, will form the core of the network. Reports indicate that at least the industry’s demand of a larger chunk of the spectrum may be fulfilled.

The industry has been aiming to offer enterprise solutions around the internet of things (IoT), artificial intelligence (AI), virtual reality (VR), and Industry 4.0 applications.

What is there for India’s 5G rollout?

Telcos, particularly Bharti Airtel and Vodafone Idea, have been demanding a cut in the base price of 3.3-3.6 GHz band which was set up at Rs 492 crore per MHz by TRAI in 2018. What’s more, the DoT had said that the unsold 700 MHz spectrum will once again be on sale in the 5G spectrum auction, along with the earmarked band.

However, in March this year, the coveted 700 MHz spectrum band did not find any buyer. At Rs 6,568 crore per unit, the band still remains a pipe dream for the telcos. In fact, none of the telecom operators bought the band during the spectrum auction in March with Bharti Airtel specifically pointing out that the band did not have any economic case for operators. Even, Reliance Jio and Vodafone Idea remained wary during the sale.

TRAI, however, believes that the price is justified and that the band remained untested. In 2019, it scuttled the DoT move to cut 5G airwaves pricing, and categorically said: “The authority reiterates the spectrum valuation and reserve prices as contained in its recommendations dated 1st August 2018.”

Interestingly, DoT has allocated spectrum in not only the mid-band but the 700 MHz and mmWave band too. The DoT wants the telcos to develop India-relevant use cases for this band. The telcos had also called this a moot point since there were no guarantees that the government will make these bands available.

The situation remains unclear, though. If the government sticks to its spectrum price, 5G will not just come later to India, but it will also come at a much higher price. Without a proper spectrum portfolio, telcos can’t deploy affordable and nationwide 5G.

hemantka@cybermedia.co.in