Telcos call for affordable 5G spectrum for a viable 5G network

At the India Mobile Congress 2021, the telcos voiced their demand for an affordable 5G spectrum to ensure a smooth rollout.

The 5G Spectrum Price Conundrum

Both Bharti Airtel and Vodafone Idea said that without an affordable 5G spectrum, 5G will not become viable. At the event, Bharti Airtel Vice-Chairman Akhil Gupta noted the positive effects of the telecom relief package, mirroring his views at the Voice&Data TLF 5G Conference. He added that the recent tariff hikes are only a "small" step towards financial stability and improved financial performance. Gupta added that tariff hikes would allow the telco to invest properly in 5G.

Vi CEO Ravinder Takkar said that a 5G rollout will require about $60-70 billion in investments. Therefore, the government needs to ensure access to low-cost spectrum, he added. Takkar further added that the government needs to clarify these issues on priority. Takkar said, "our focus on leveraging new technologies and partnerships has led us to become the first telecom company in India to develop a wide range of 5G use cases. We have embraced Cloud for our core network and continue to upgrade our transport and radio networks to cater to the huge traffic demand which will arise from billions of connected devices in the future".

The Spectrum Price Decision

TRAI has reported in its consultation paper that the DoT has asked for prices in the 526-698 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-
3670 MHz and 24.25 – 28.5 GHz bands for 5G. Also, two new bands will debut at the 5G spectrum auction; the 526-698 MHz and the mmWave bands.

Per the consultation paper, TRAI uses a variety of methods to decide on the spectrum prices. First, it looks at international spectrum pricing, and then, it looks at the technical efficiency factor. Basically, a technical efficiency factor defines how a particular spectrum band is better than a benchmark spectrum band. For instance, the regulator decided on the base price of the 700 MHz spectrum by setting the 1800 MHz band as the benchmark. Then, it compared the two bands for technical superiority and priced the former band accordingly.

As such, TRAI has acknowledged the importance of mmWave in India. In clause 2.39, TRAI said,

As per a report on “The Impacts of mmWave 5G in India” published by GSMA in October 2020, mmWave spectrum, in particular, will play a crucial role in enabling the high-speed and ultra-low-latency features required by many 5G applications. India will benefit significantly from mmWave-enabled 5G. Over the period 2025–2040, it has been estimated that mmWave-enabled 5G will deliver $150 billion in additional GDP for India.

Therefore,  TRAI has recommended DoT to set a “balanced intermediate reserve price”, so that the government can monetize spectrum effectively. Also, TRAI said that the price should not be too high so that the TSPs can participate in the auction.