According to recent reports in the Indian press, The Cellular Operators’ Association of India (COAI) has added its voice to those concerned about prices for 5G spectrum recommended by the Telecom Regulatory Authority of India (TRAI).
The industry body suggested this week that its member companies could be unwilling to invest in 5G spectrum at the imminent auction as upfront prices are hard to justify. The Broadband India Forum (BIF) has also commented, attempting to remind government of the economic benefits lost from spectrum unsold in past auctions because of high prices. The government needs to ensure “reasonable” rates for the upcoming 5G auction, it suggested.
It argued that spectrum prices should be set to ensure as much spectrum as possible is sold, with all the economic benefits that might imply, and that prices should not be set based on short-term financial gains.
Recommendations of high base price, along with high valuation of spectrum, are certainly likely to cause problems for some of the cash-strapped Indian operators. In fact in The Hindu newspaper the BIF suggests that, in absolute terms, the recommended reserve auction price is five-to-six times higher than in other countries.
However, that’s not the only hurdle operators have to face. Their ability to offer an appealing portfolio of services might also be limited by the amount of spectrum being made available to mobile operators for 5G: a mere 175MHz. Although more is available, India’s defence and space departments have apparently claimed the remaining 125MHz.
Also, as more than one commentator has pointed out, 4G is not yet ubiquitous in India and 5G may not be affordable for many Indians. Still, assuming the auction goes ahead we should find our before the end of this year whether TRAI's pricing policy really has scared off investors, as COAI suggests it might.
