COAI asks government to reduce 5G spectrum base price by more than half

The Cellular Operators’ Association of India which represents the private telcos -Bharti Airtel, Reliance Jio and Vodafone Idea (Vi) – has asked the telecom department to reduce base prices of 5G airwaves by more than half, if it wants a successful auction.

“The telcos via COAI have said unless airwave prices are not dropped by 60-70%, then 5G auctions won’t be successful. The three telcos will participate better if prices are lowered,” said a senior executive of one of the private telcos. The letter was sent a week ago.

The government is expected to auction 5G airwaves in April-May 2022, but prices have remained a contentious point.

Lowering the base price of 5G spectrum is critical to the success of the auctions, industry executives and experts said.

Vi’s managing director, Ravinder Takkar in a recent analyst call cautioned that if the base rates for 5G spectrum are not brought down, there will once again be no takers for those airwaves.

The current base price of Rs 492 crore for a unit of 5G spectrum in the 3.3-3.6 GHz band has been deemed too expensive by all three private players. At suggested price, it is the most expensive in the world, with rates in countries like Italy, US, Korea and UK far lower.

Meanwhile, the three rivals are in the midst of testing 5G use cases on government allotted spectrum.Last week, Airtel became the first telco to test 5G technology in the 700Mhz band, while Vi demonstrated use cases of 5G trials.

Reliance Jio had earlier said it is ready to be a global 5G vendor and stressed on how 5G will impact agriculture, education, healthcare and the telco is working to bring in the technology in these areas. It is conducting large scale 5G trials using its own 5G stack and is testing various use cases.

To be sure, all the bands being currently used for 4G could be used for offering 5G services in future. But currently India has earmarked the 3300-3600 MHz band for the next generation services.

The Department of Telecommunications (DoT) has sent a reference to the Telecom Regulatory Authority of India (TRAI) seeking fresh prices of the 3300-3600 MHz band, as well as for newer bands which could be used for 5G in future. The Trai has since asked the DoT to chalk out a roadmap on available bands and their usage. On receiving a reply, Trai will come out with a consultation paper soon on the upcoming auction, which would cover which bands, their pricing as well as the quantity of airwaves to be sold in the next sale. PTI