The credit rating provider Fitch expects base prices for 700 Mhz and 3.3-3.6 GHz bands to come down in India. 5G spectrum sale in the country is likely to be held in 2022.
According to Fitch Ratings, TRAI (Telecom Regulatory Authority of India) is expected to cut the base costs of coveted airwaves pertaining to the 700 Mhz and 3.3-3.6 GHz bands available. The global rating agency estimates that the 5G spectrum sale will be held next year.
"We expect 5G spectrum is likely to be auctioned in 2022, and for commercial launch in 2023, and we expect the (sector) regulator to reduce the reserve price for future auctions of 700 Mhz and 3.3/3.6 GHz bands, which can be used for 5G," Fitch Ratings said in a press release.
The Department of Telecommunications (DoT) had set the ball rolling for the next spectrum auction in September by sending a reference to Trai, seeking fresh base prices for the gamut of airwave bands, including 700 MHz, 3.3-3.6 GHz, and new ones such as 600 MHz and the precious mmWaves like 26 GHz and 28 GHz that support both 5G mobile and satellite services.
Fitch Ratings said that Airtel and Jio’s revenues are going to grow by 8% to 12% in 2022. “We expect Bharti and Jio’s 2022 revenue to grow by around 8%-12% and the Ebitda margins to remain stable, on growth in (their) mobile and fixed-broadband segments,” Fitch Ratings said.
Further, the rating firm said that the average revenue per user (ARPU) of the telcos will also increase on the back of possible tariff hikes and migration of legacy network users to 4G services.
It also estimates that the telecom industry’s monthly average revenue per user (ARPU) will rise 15%-20% on-year (from Rs 129 in FY21), on the back of likely “headline tariff hikes and growing migration of 2G users to higher-priced 4G plans”.