India's govt. advised to make 5G spectrum more affordable
India should make 5G spectrum available at affordable rates to ensure the sector remains competitive, the Competition Commission of India (CCI) has advised.
Costly rates would allow service providers with better financial resources to launch 5G ahead of others, it fears.
"The current financial health of the sector as a whole could result in an uneven speed of adoption of 5G by operators, the more profitable ones are likely to be faster off the block," said the CCI in a study. "In case this scenario unfolds, it will have implications for the level of competition in the long run."
Reliance Jio is currently the only profitable service provider in India. While it plans to launch 5G later this year, rivals Bharti Airtel and Vodafone Idea have said they do not think the market is ready for 5G services.
The CCI report acknowledges that "the spectrum for 5G in India will be relatively more expensive than other countries."
Indian operators have repeatedly voiced concern about the high price of the 5G spectrum.
The base price of airwaves between 3.3GHz and 3.6GHz is 3.63 trillion Indian rupees ($49.7 billion), a huge outlay for telcos before they have even built networks.
The 5G spectrum auction is likely to be held later this year, but Airtel and Vodafone Idea have said that they will not participate unless prices are reduced.
"Creating a competitive market for 5G will be crucial to its success in India. This will imply ensuring assignment of the spectrum at a reasonable cost balancing revenue realization and industry viability," says the CCI report. "This will ensure that the capital market remains interested in funding network upgradation and expansion, including the acquisition of spectrum."
Jio has also complained about prices, although it would prefer auctions to be held at the earliest opportunity.
It has developed its own 5G technologies and is eager to launch these before marketing them in other countries.
Launching 5G ahead of rivals would give Jio a big head start, potentially allowing it to attract wealthier subscribers from other networks.
— Gagandeep Kaur, contributing editor, special to Light Reading