Barcelona: The reserve price of 5G spectrum recommended by the Telecom Regulatory Authority of India (Trai) is “pretty reasonable" and it is up to the government to decide when to hold an auction, Trai chairman R.S. Sharma said on Wednesday. “We have given the reserve price recommendation and we stand by that," Sharma said on the sidelines of the Mobile World Congress 2019 (MWC 2019) in Barcelona.
This comes a day after Bharti Airtel chairman Sunil Mittal said the 5G spectrum price recommended by Trai was “unacceptable" and it would not buy 5G spectrum at that price. Mittal had also said that taking the price of renewal spectrum bought by operators in the last auction as a base for future auctions was not logical, Mint had reported on Tuesday.
Trai had in August recommended to the department of telecommunications (DoT) the auction of 20MHz blocks in the 3,300-3,600MHz spectrum band, the airwaves earmarked for 5G, at ₹492 crore per MHz. In South Korea, same band was priced at roughly ₹131 crore per MHz in auctions held in June.
“Our view is reserve price that has been set (by Trai) is pretty reasonable," Sharma said.
Spectrum auctions are a major source of revenue for the exchequer. There was no auction in 2017-18, while in 2016-17 the government had raised ₹65,789 crore, a fraction of the ₹5.63 trillion worth of spectrum it had put up for sale at base price. There would be no auction in 2018-19. The DoT plans to hold an auction in the second half of calendar year 2019.
The telecom sector has witnessed intense competition after the entry of Reliance Jio Infocomm Ltd in 2016 hammered tariffs and hit revenue streams of other operators.
Countries such as Ireland, the Czech Republic, the UK, and South Korea have already completed auctions for 5G bands. The US in November kicked off auction of spectrum in the 28 GHz band, followed by the 24 GHz band.
“It is too early for a 5G auction (in India)," Vodafone Group chief executive officer Nick Read had said on Monday.
5G is seen as the next frontier in machine-to-machine communication, enabling secure connectivity between devices other than smartphones, such as sensors, vehicles, robots, and drones.
That potentially opens the possibility of industry-altering changes in sectors ranging from agriculture and healthcare to manufacturing and warehousing.
The writer is at the Mobile World Congress in Barcelona at the invitation of Huawei.