NEW DELHI: Telecom operators are expected to raise tariffs for 4G services in the second half of the current fiscal to ensure mass adoption of 5G services. As per the industry insiders, mass 5G rollout may happen only next fiscal as liberalisation (a pre-requisite for effective 5G deployment) is feeble now, and telcos are required to launch commercial services in at least one city of each circle by the end of the first year of acquiring the licence, as per rollout obligations.
Thus, the full benefit of tariff hikes and the 5G launch will be realised in fiscal 2024. “Given the sizeable investments towards spectrum acquisition, we believe telcos will charge differential pricing for 5G services. Indeed, adoption of 5G services will hinge on the extent of premium over 4G tariffs,” said Manish Gupta, senior director, CRISIL Ratings.
“In a bid to ensure mass adoption of 5G, telcos may raise tariffs for 4G services, despite the two rounds of tariff hikes affected in December 2019 and November 2021, respectively. We expect another tariff hike for 4G services in the second half.” Emkay Emkay Global Financial’s research report said it believes spectrum-related payout and Adani’s potential entry in the business-to-consumer (B2C) space is now behind and focus will shift towards tariff hike quantum and timeline.
“We have baked in a 15% tariff hike in our assumption along with spectrum usage charge (SUC) savings of `8 billion and `20 billion in FY24 and FY25, respectively, as we assume saving would fully reflect once fresh spectrum is put to use,” reads the report.
The Department of Telecommunication (DoT) mopped up a whopping Rs 1,50,173 crore in the first-ever 5G spectrum auction, selling 71% of the total spectrum put up for sale. Cash-rich Reliance Jio spent Rs 88,078 crore to acquire spectrum, Bharti Airtel invested Rs 43,084 crore, while Vodafone Idea put in Rs 18,799 crore to acquire spectrum. However, experts are of the view that the additional spectrum purchased in this auction could elevate the sector’s debt to Rs 6.1 lakh crore.
5G spectrum for private use: Adani
New Delhi: Gautam Adani-led Adani Group on Tuesday said the Rs 212 crore worth of spectrum it has bought in a millimetre wave band will be used to create a private network to support its businesses and data centres. Adani Data Networks Ltd (ADNL), a unit of Adani Enterprises, acquired the right to use 400MHz of spectrum in the 26GHz millimetre wave band for 20 years. It has bought less than 1% of the spectrums sold in the auction. The government has received bids for Rs 1.5 lakh crore.