Telecom industry not in favour of early 5G spectrum auction

At a time when telecom industry is striving hard to expand the 4G Network across India, the government is gearing up to launch the next-generation 5G services. It is being said that the 5G spectrum will be commercially available in the beginning of 2020. The government, however, has not announced its plan to auction the spectrum that will be required to support the 5G network in the country. 

Telecom Industry is enthusiastic about the launch of 5G services, but is of the view that looking at poor financial state of the sector, the government should auction the spectrum a few days before its commercial launch. 

Since the banking sector is already confronting financial stress, the Cellular Operators Association of India (COAI) feels that the lenders may not offer loans to the telecom industry to bid for the spectrum. Due to this, the players will have to depend on foreign resources. 

The steering committee, which was constituted to identify the 5G deployment roadmap for India, submitted its report titled 'Making India 5G Ready' to the government on August 23, 2018. TRAI has recommended that the base price for the 3300-3600 megahertz band for 5G services should be fixed at Rs 492 crore per unit. 

"We obviously would like that the domestic banks start lending to the industry. However, given the present financial stress of the banking industry and the exposure they had in the industry many banks are not interested in continuing lending at this point. So, we are reliant on external sources and so that it is going to be depended on the financial health of the industry because they look on the revenue stream in order to repay the debt so this is why we continue to emphasize that the financial distress of the industry today needs to be addressed and we have asked that these matters be taken into consideration by the government again," says Rajan Mathews, DG, COAI. 

Mathew added, "We have said to reduce spectrum usage charges, reduce licence fees and get this money back into the hands of the operators, reduce the GST rates that is at 18 per cent". 

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COAI, the industry association of mobile service providers, says that the telecom service providers will not be enthusiastic to participate in the auction at this base price. This is the reason that they want that spectrum usage charge and license fee should be excluded while setting its base price. The spectrum should be auctioned around 2020, said COAI.