COAI Says Planned Base Price of India's 5G Spectrum Is Too High

India's top telecom lobby said the government's proposed base price for the auction of spectrum for next-generation 5G networks is too high as India outlined plans to launch the sale process this year.

The proposed auction price will be a "serious impediment" to the uptake of 5G in India, said Rajan Mathews, director general of lobby group Cellular Operators Association of India (COAI).

"The majority of our members believe the present proposed pricing of 5G spectrum is unaffordable," Mathews said in a brief statement, adding they were above the rates in 5G auctions in other parts of the world.

India's largest telecommunications companies, including Vodafone Idea, Bharti Airtel Ltd and Reliance Industries Ltd's Jio - all members of COAI - are expected to participate in the auction.

The Telecom Regulatory Authority of India (TRAI) has recommended a base price of 4.92 billion Indian rupees ($71 million) to license a unit of spectrum for use across 22 Indian regions.

Companies have to bid for blocks of at least 20 units, so securing pan-India 5G spectrum will cost a company at least $1.42 billion at base price levels.

A spokesperson for Bharti Airtel said whether it participates in the auction will depend on pricing, adding he hopes prices will get set at levels that "encourage more investments in networks rather than spectrum purchase."

Vodafone Idea, India's largest telecommunications company by subscribers, said 5G spectrum must be made available "at the right price and under right terms and conditions" for the Indian telecom sector to make broadband accessible to all.

A source at Vodafone Idea noted that ultra-low data prices in India, coupled with the still limited use cases for 5G tech in the country, make it hard to justify a huge spend on spectrum at this juncture.

Trials planned
Next-generation 5G networks, which can provide data speeds at least 20 times faster than 4G, are seen as vital for emerging technologies like self-driving cars and artificial intelligence.

India's Telecom Minister Ravi Shankar Prasad told media on Monday the newly-elected government plans to commence 5G trials within 100 days and conduct the auction of 5G airwaves in 2019.

In a series of tweets, Prasad added he would consult with the telecom industry to understand their issues and challenges.

The global rollout of 5G technology has been complicated by US sanctions against Chinese telecom giant Huawei Technologies US officials have also lobbied allies not to use Huawei network equipment in their 5G networks.

Huawei, the world's largest telecoms network gear maker, has repeatedly denied being controlled by the Chinese government, military or intelligence services.

When asked whether India would permit Huawei to participate in the upcoming 5G trials, Prasad said deciding on participation was "a complex question, including security issues", the Economic Times reported.

Telecom operators have not yet received any direction from India's telecom department regarding exclusion of any company from participating in 5G trials, Mathews said.

Jio - the fast-growing new entrant in the space - backed by Asia's richest man Mukesh Ambani, did not respond to Reuters' requests for comment on 5G.

Citing a source close to Jio, the Economic Times earlier on Tuesday reported that Jio was unlikely to oppose the 5G auction rates.

Germany, among the earliest to auction frequencies for 5G services, drew in 6 billion euros ($6.8 billion) in bids by late-May for the 41 blocks it put on offer.

© Thomson Reuters 2019