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5G Spectrum Price Unaffordable; Needs To Be Brought Down: Airtel

Telecom operator Bharti Airtel on Friday said the base price of spectrum recommended by the regulator is “exorbitant” and unaffordable and urged the government to review the price of radiowaves to set the stage for an aggressive 5G play.

“These prices are exorbitant, given that the state of 5G ecosystem is still nascent. So, we would hope that the government brings down the prices of spectrum and reserve them. That is the stage where we would look seriously at 5G,” the company’s MD and CEO, India and South Asia, Gopal Vittal, said.

Vittal said the base prices recommended by the Telecom Regulatory Authority of India (TRAI) places the radiowaves in a ballpark range of Rs. 50,000-55,000 crore for 100 MHz of spectrum.

“5G requires large quantities of spectrum. If you have 40 MHz, you don’t get 5G-type requirement, so in terms of speed and latency, you require large chunks of spectrum. Clearly, these are prices we can’t afford,” he said.

Competitive market

In an earnings call, the management of Bharti Airtel said the competitive intensity has stabilized to the extent that the company has not seen a reduction in tariffs.

But it conceded that the marketplace continues to be brutal, given that the Average Revenue Per User (ARPU) — which used to be about Rs. 200 — has slipped to Rs. 125.

The capital expenditure of the company had already peaked in FY19, and the current financial year would see a moderation in capex, the company said. However, it did not provide a guidance for the same.

The company said that its ARPU rose by 6.5 percent to Rs. 123 in the January-March quarter which is still not at a “sustainable” level for the sector.

The company had an ARPU of 116 in the same period a year ago.―The Hindu Business Line

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