5G Spectrum Auctions in 2022: Stakeholders Positive on Next-Gen Network Rollout in India

Finance Minister Nirmala Sitharaman while presenting the Union Budget 2022 on Tuesday announced that the required spectrum auctions for 5G telecommunication networks will be conducted in 2022. “Telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities,” the minister said in her speech. She also added that the spectrum auctions will enable rolling out of 5G services by private telcos within 2022–23 — aligning with the previously stated timeline where the next-generation cellular connectivity was expected to be rolled out in the coming months.

The announcement made by Sitharaman has been considered as a positive move by smartphone manufacturers.

“With 5G technology implementation within 2022–23 by private telecom providers, we foresee propelling growth and a huge opportunity presented for the demand of 5G enabled devices,” said Sanmeet Singh Kochhar, Vice President for India and the Middle East and North Africa (MENA) of Nokia brand licensee HMD Global.

He added that 5G would open new economic opportunities and benefits for India.

A Xiaomi spokesperson also stated that the rollout of 5G services in the country would make the country future-ready.

“We are excited about the government's commitment to roll out 5G by 2023, which will head into a new year of interconnected devices,” the spokesperson said.

Venu Cheriyan, Chief Financial Officer at Sennheiser India, said that the arrival of 5G networks in the country would benefit not only smartphones but also other sectors including the ones catering to media and entertainment.

“With the announcement of the 5G spectrum auctions to be held this year and the swift adoption of 5G mobile services, we are bound to see an increase in content consumption, which in turn will lead to a potential rise in the audio accessories industry,” Cheriyan underlined.

He also added that the low latency and higher bandwidths that the 5G environment would bring a new experience for the wireless audio transmission of music.

Foxconn-owned electronics manufacturing services (EMS) firm Bharat FIH believes that the announcement of the 5G spectrum auctions would result in a boost in the demand for 5G phones in the country.

“The announcement will enable more consumers to be included in the next level of digital economy,” said Josh Foulger, Managing Director, Bharat FIH.

However, Tarun Pathak, Research Director at research firm Counterpoint, believed that 5G rollouts would not bring any significant changes to the smartphone market.

“We expect 5G smartphone sales to increase three times this year even without networks, and brands would still like to go aggressive on the same as 5G as a feature is the third preferred one as per Counterpoint consumer lens,” said Pathak. “So, I guess nothing much will change with respect to OEM strategy. But at least we now have clarity on auctions.”

In addition to announcing the launch of 5G spectrum auctions, Sitharaman revealed that the government would launch a design-led manufacturing scheme to build an ecosystem for 5G. It will be available as a part of the Production Linked Incentive Scheme, she said.

The minister also stated that the government would complete the long-standing optical fibre-based project called BharatNet by 2025. The project is promoted to offer high-speed Internet connectivity in villages and remote areas.

Peeyush Vaish, Partner and Telecom Sector Leader at Deloitte India, noted that the planned moves would speed-up the rollout of 5G services across the country over previous cellular network generations.

“The roll-out across the country will also happen much faster than other previous generation roll-outs considering the fact that the Finance Minister, in her speech, has also talked about fiberisation of all villages by 2025,” Vaish said.

Nitin Bansal, Managing Director for India and Head of Networks for Southeast Asia, Oceania, and India, at Ericsson, stated that the telecom-focussed announcements made by the Finance Minister would bring the “required impetus” to create reliable Internet connectivity in the country.

Telcos are also positive of the plans laid down in the Budget 2022 speech. However, telecom industry body Cellular Operators Association of India (COAI) expressed some disappointment over delayed government addressal of demands by the sector.

“We are committed to fulfilling the Digital India Vision of our Honourable Prime Minister, however, we are a bit disappointed that our long-standing demands remain unaddressed,” said SP Kochhar, Director General, COAI. “We look forward to continued and constructive engagement with the Government for reduction of levies on the telecom sector.”

Details about the price-band and exact timelines of the spectrum auctions for 5G airwaves are yet to be revealed. Given the ongoing losses impacting telcos including Vi, it is also unclear whether all players have the efficiency to properly bid for the next-generation network technology.