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May 21, 2020
India is likely to proceed with a spectrum auction before October this year, although it plans to exclude the 5G spectrum (that is in the 3.3GHz to 3.6Ghz frequency range) from its offering.
What will then be another 4G auction would include spectrum in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz bands. In total, about 8000MHz of spectrum, valued at roughly 3 trillion Indian rupees ($39.5 billion), will be on sale. Delayed from last year, the auction is crucial for Bharti Airtel and Vodafone Idea, both of which hold licenses that are coming up for renewal in several circles (service areas).
But all the service providers, including Reliance Jio as well as Airtel and Vodafone Idea, have asked the government to lower the high base price for the spectrum, and especially that of 5G. Airtel says it will not participate in the auction at the current reserve prices. The Department of Telecommunications has attached a base price of INR4.92 billion ($64.9 million) per MHz to spectrum in the 5G band.
Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.
Authorities have shortlisted four auctioneering firms, mJunction Services Ltd, C1 India Pvt Ltd, MSTC Ltd and e-Procurement Technologies Ltd, to carry out the auction. They plan to name the final auctioneering company very soon.
Apart from COVID-19, another possible reason for postponing the sale of 5G spectrum is the poor health of the telcos. That makes it unlikely the government would generate decent proceeds from the sale at this time. A recent court ruling about fees the telcos owe the government has further harmed their financial health, making it hard for them to participate in the auction.
Moreover, the 5G ecosystem is far from developed. The lack of "use cases" for the new technology means telcos are unable to justify the high spectrum costs to investors. This was the reason Vodafone Idea gave when it pushed for a reduction in fees.
Authorities have also yet to decide whether the 5G market is open to Chinese vendors Huawei and ZTE. Huawei has been banned from several countries, including Australia and the US, over security concerns. Initially, Chinese vendors were not invited to participate in India's 5G trials, although this was later changed. Now, India's government is under immense pressure from the US to ban Huawei.
The current backlash against China over coronavirus, which originated in the Chinese city of Wuhan, makes the decision even harder for India's government. That lack of clarity may have been the main factor in the postponement of the 5G auction.
— Gagandeep Kaur, contributing editor, special to Light Reading
Read more about:Asia
With more than a decade of experience, Gagandeep Kaur Sodhi has worked for the most prominent Indian communications industry publications including Dataquest, Business Standard, The Times of India, and Voice&Data, as well as for Light Reading. Delhi-based Kaur, who has knowledge of and covers a broad range of telecom industry developments, regularly interacts with the senior management of companies in India's telecom sector and has been directly responsible for delegate and speaker acquisition for prominent events such as Mobile Broadband Summit, 4G World India, and Next Generation Packet Transport Network.
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