The Telecom Regulatory Authority of India’s (TRAI) proposal to offer 5G spectrum at substantially reduced prices paves the way for auctions and roll-out of 5G services in the country by the end of the year. Back in 2019 the regulator had set a base price of ₹492 crore per megahertz (MHz) for the 3,300-3,600 MHz band, which has been earmarked for 5G. Under the new proposal, the same spectrum can be bought for ₹320 crore. Similarly, the 700 Mhz band, which was priced at ₹11,900 crore per MHz in 2016 is now being offered at ₹3,900 crore. This is a welcome shift from 2019 when the regulator had refused to review the pricing. However, the TRAI could have pushed the envelope further in light of the financial constraints being faced by the telecom industry. An operator would need about 100 Mhz spectrum in the 3,300-3,600 MHz band and another 20 MHz in the 700 Mhz band to offer good quality 5G services. Even after the reduction in prices, the operator will still have to pay at least ₹70,000 crore to acquire that much spectrum. This would elevate the debt levels of the industry, which in turn will squeeze the investments required for rolling out 5G network infrastructure. The telecom sector has been on a revival path after the Centre’s bailout package. The Department of Telecom should therefore review the TRAI’s formula and consider reducing the reserve price further keeping in mind the financial stress in the telecom sector and the affordability of services.
Podcast | Why TRAI’s spectrum recommendations are important
In addition to improving mobile broadband, 5G technology will enable the delivery of critical services such as telesurgery and Internet of Things over a mobile network with unprecedented efficiency and open the floodgates for innovative applications that require a massive amount of high-speed bandwidth. In this context, TRAI’s decision to allow companies and institutions to own spectrum and run private networks will be a gamechanger.
The biggest benefit for millions of mobile users in a country like India is that 5G promises to take wireless networks close to what wireline broadband networks offer in terms of uninterrupted service and unlimited bandwidth. Here, the proposal by the TRAI to offer the millimeter wave spectrum for just 2.20 per cent of the valuation of the 3300- 3670 MHz band will help operators roll out affordable fixed wireless broadband services. Over the period 2025–2040, it has been estimated that mm-wave-enabled 5G will deliver $150 billion in additional GDP for India. The regulator has, however, missed out on the crucial aspect of quality of services. While India cannot afford to delay the 5G rollout, the TRAI must review the quality of service parameters of existing 2G and 4G networks. Consumers are still grappling with basic network issues like voice call drops and interrupted data services. There is no doubt that the fifth-generation wireless technology will bring massive improvements in consumer broadband services and industrial applications but it is important to ensure that the telecom industry is well-positioned to put the infrastructure in place. Finally, it is paramount that consumers benefit from the new technology.