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Spectrum auctions will be conducted this year to roll out 5G services, announced Finance Minister Nirmala Sitharaman in her Union Budget 2022 speech on Tuesday, outlining the government's priorities. 

Scheme for design led manufacturing in 5G will be launched as part of PLI scheme, the FM said.

The national capital will also launch a scheme for design-led manufacturing to boost 5G in the country, FM Sitharaman said in a speech in parliament.

She said the telecommunications sector in general and 5G, in particular, can enable growth and offer job opportunities.

Sitharaman also said that to enable affordable broadband and mobile service proliferation in rural and remote areas, 5% of annual collections under the universal service obligation fund will be allocated.

"The (5G) 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," said Peeyush Vaish, partner and telecom sector leader at Deloitte India.

India bailed out its cash-strapped telecoms sector

The country's federal government late last year bailed out its cash-strapped telecoms sector by announcing measures including a four-year moratorium on airwaves payments due to it and allowing mobile carriers to convert interest they owe New Delhi into equity.

That has helped telecoms firms free up cash to invest in growth and expansion, potentially making a 5G airwaves auction this year a hot bidding contest between the country's three main carriers - Reliance Jio, Bharti Airtel and Vodafone Idea.

Jio, the telecoms venture of oil-to-retail conglomerate Reliance Industries, has previously said it will be the first carrier to launch 5G services in India.

India has more than a billion wireless subscribers and its deep market potential pushed tech giants Facebook and Google to together pour roughly $10 billion into Jio, the country's biggest mobile operator, in 2020.

Google has spread its bets even wider as it will invest up $1 billion in Jio's rival Bharti Airtel, a plan that was announced last month.

Telecom reforms to spur liquidity

According to Economic Survey 2021-22, the telecom sector reforms are poised to boost 4G proliferation, infuse liquidity and create an enabling environment for investment into 5G networks.

In the wake of "outstanding performance" of the telecom sector in meeting COVID-19 challenges and with a huge surge in data consumption due to online education and work from home, the reform measures will bolster proliferation and penetration of broadband and telecom connectivity, said the Economic Survey tabled in Parliament on Monday.

In addition to telecom infrastructure expansion, a slew of measures have been taken to bring about reforms, the survey said, outlining the structural and procedural reforms undertaken in the Indian telecom sector that represents the world’s second-largest telecommunication market.

"The reforms are also expected to boost 4G proliferation, infuse liquidity and create an enabling environment for investment in 5G networks," it added.

A strong and responsive regulatory framework has kept service access at reasonable prices, with the government taking further measures to ensure fair competition among service providers with the view to benefit the consumers.

Telecom is among the most powerful sectors impacting the social and economic development of a country, the survey said observing that the relevance of the sector has "increased immensely".

The same is reflected in key metrics, such as growth in total telephone subscriber base, steady increase in internet subscribers, and broadband connections.

In the last few years, the telecom sector in India has become data-driven following reducing costs of data due to the fierce competition in the sector. This has boosted data usage further.

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