10
Mar, 2022

India considering lowering prices of 5G spectrum at upcoming auction

Over two years ago, India’s government expressed its intent to set the reserve price for 5G airwaves at 4.92 billion rupees ($64.1 million) per megahertz of spectrum in the 3,300MHz to 3,600 MHz bands. 
 
Since then, the Indian operators have repeatedly complained to the Telecom Regulatory Authority of India (TRAI) that this price was extortionate…

Over two years ago, India’s government expressed its intent to set the reserve price for 5G airwaves at 4.92 billion rupees ($64.1 million) per megahertz of spectrum in the 3,300MHz to 3,600 MHz bands. 

Since then, the Indian operators have repeatedly complained to the Telecom Regulatory Authority of India (TRAI) that this price was extortionate, noting it to be 30–40% higher than the prices paid in comparable markets around the world. Some of the telcos, including Bharti Airtel, have previously said that they will not bid for the spectrum at all if the prices are not reduced, with the sector warning TRAI that half the spectrum would remain unsold at its current price.
Now, in an effort to entice local operators to participate, India is considering reducing the floor price of 5G airwaves, according to sources speaking to Bloomberg. 
This would be major turn around for the Indian government, which has refused to budge on the issue of price for the past two years. Reports just last month were suggesting the government would ignore the telcos pleas, with an anonymous government official saying “the government is not going to do it” with regards to lowering reserve price.

This proposed reduction of the reserve price, combined with the potential development of the Made-In-India 5G sub-standard called 5Gi, would be substantial in combatting the enormous costs associated with rolling out this new network technology. 

While some telcos have expressed concern with the costs of designing 5Gi networks, telcos like Jio have revealed their readiness to switch to 5Gi if vendors can promise lower prices for 5Gi-compatible hardware. 

The spectrum auction, due to take place in September or August, will determine whether India will begin catch up with its 5G competitors in other major Asian markets, such South Korea, Japan, and China. All three of these competitors having launched 5G services years prior, with China noting almost half a billion 5G subscribers in December last year. 
 

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