NEW DELHI: Telecom firms, facing a financial crunch, are batting for reduction in reserve prices for 5G auction. The telcos are drained out by an intense market share battle, coupled with debt taken on to pay for earlier rounds of spectrum auctions.
While firms such as Bharti Airtel and Vodafone Idea have been supporting postponement of the auction till 2019-2020, as well as lowering of the “exorbitant” spectrum reserve prices suggested by regulator Telecom Regulatory Authority of India, new entrant Jio is believed to be backing the rates and the auction’s timing.
According to industry body Cellular Operators’ Association of India (COAI), the recommended base price of 5G radiowaves is nearly 30-40 per cent higher than that in markets like South Korea and the US. “Majority of our operators have indicated that 5G spectrum is far too prohibitively expensive and their balance sheets can’t afford this,” COAI director general Rajan Mathews said. This suggests that Jio stands to benefit the most as it is the only player with cash. The others are reeling under debt and losses, and may not have the appetite for new spectrum purchases.
Mathews also said incentives should be built into the spectrum price, given that 5G services in India also aims to serve social goals.
Recommendation
TRAI has recommended auction of about 8,644 MHz of telecom frequen-cies, including those for 5G services, at an estimated total base price of I4.9 lakh crore. For the 700 MHz band, which went unsold in the 2016 failed auction due to high reserve prices, it suggested a 43 per cent cut at I6,568 crore a unit.