Indian carriers Bharti Airtel and Vodafone Idea will probably not take part in the country’s 5G spectrum sale scheduled to take place in the second half of the year, if the telecom regulator fails to lower current recommended reserve prices, local newspaper Economic Times reported.
“It doesn’t make sense for us to buy at these levels, when the ecosystem won’t be developing for the next two to three years,” the newspaper quoted a top executive of Bharti Airtel as saying.
Rajiv Sharma, co-head of research at SBICap Securities, said that Vodafone Idea is unlikely to bid for 5G spectrum at current base prices “as the telco doesn’t have an existing pan-India 4G network that is essential for any telco planning to spend top dollars on 5G,” according to the report.
Analysts believe that local carrier Reliance Jio will probably take part in the process, as it is the only profit-making telco in the Indian market.
The Department of Telecommunications (DoT) had recently asked the Trai to lower the starting prices, which the regulator refused. “There was a chance for the Trai to reduce 5G prices. Let’s see what the DoT does now. But at current rates, Airtel won’t buy,” Airtel’s executive reportedly said.
Vodafone Idea CEO Balesh Sharma has previously said that the prices recommended by the regulator were ‘exorbitant’. The telco said it will participate in the next auction but did not confirm if it would buy 5G spectrum.
Hemant Joshi, partner at Deloitte India, said it would be “prudent to defer the 5G auction till 2020 at least since at Trai’s recommended base prices, the industry response may be very lukewarm.” He also said that the reserve prices need to be lowered, taking into account the experiences in countries where 5G spectrum was recently auctioned.
India’s incumbent telecom operators were expected to launch 5G trials in June after a panel at the Telecom Ministry had recommended spectrum for the testing.
The panel, which deliberated on the amount of necessary spectrum and duration of the 5G trials, recommended 5G spectrum to Airtel, Vodafone Idea and Reliance Jio initially for a three-month period, which could be increased to one year if more time is needed for network stabilization.
According to previous local press reports, Samsung Electronics, Nokia and Ericsson have received the green light from the government to take part in the 5G trials.
Reliance Jio was seen as likely to partner with Samsung, Nokia with Airtel and Vodafone-Idea with Ericsson for the 5G trials, according to the reports.
Following these initial network trials, the Indian government aims to launch a 5G spectrum auction, probably in the second half of the year. The auction process will include frequencies in the 700MHz, 800MHz, 1800MHz, 2300MHz, 2500MHz and 3400MHz-3600MHz ranges.
Local carriers had previously announced plans to deploy commercial 5G services in India during 2020.
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