Barcelona: Bharti Airtel Ltd will not bid for 5G spectrum if the telecom department holds a 5G spectrum auction at the “unacceptable" prices recommended by the Telecom Regulatory Authority of India (Trai), chairman Sunil Mittal said in Barcelona Tuesday. “Pricing has been recommended, but we are saying it’s not appropriate," Mittal said.
“The government’s hands are tied by recommendations of Trai. What can they do? They can send it (recommendations) back to Trai, but Trai will again send them back (to the government)," he said.
Trai had in August 2018 recommended auctioning 20MHz blocks in the 3,300-3,600MHz band, the airwaves earmarked for 5G, at ₹492 crore per MHz.
“The fact is renewal spectrum (in the last auction) was gun to the head and operators did not have a choice and those prices are taken as base for future auctions and what logic does that make," Mittal said.
Spectrum auctions are a major source of revenue for the exchequer. While there was no auction in 2017-18, the government had in 2016-17 raised ₹65,789 crore, a fraction of the ₹5.63 trillion worth of spectrum it had put up for sale.
The 2016-17 spectrum auction was conducted at base price.
“The government had two failed auctions and do they want to have five more failed auctions? Spectrum is required, spectrum will be bought, India will get into 5G but only thing that will stand in the way is pricing," Mittal said.
The telecom sector has witnessed intense competition after the entry of Reliance Jio Infocomm Ltd in 2016, which brought down tariffs to rock bottom and hit revenue streams of other operators.
Mittal believes that while the current levels of pricing are unsustainable, the future is promising. “Eventually market has to correct itself, and this is not wishful thinking, it will happen," he said. “If you get back from ₹100 (ARPU) today to ₹200, the industry will become sustainable but ₹300 will be an ideal situation."
While Airtel awaits an uptick in tariff, it is also working toward its strategy of monetizing assets to pare debt and improve margins.
Bharti Airtel has now invited Vodafone Idea Ltd to pool their fibre assets and form a new joint venture. While Airtel has already transferred its fibre assets to its unit Telesonic Networks, Vodafone Idea plans to monetize their fibre assets.
India does not have a single independent fibre company as of now.
“We have invited Vodafone to come and join. Currently, Telesonic is a subsidiary of Airtel and if Vodafone wants to come, obviously a new structure will be created. The response (from Vodafone Idea’s side) is warm," he said.
Bharti Airtel has 263,507 route km of optical fibre.
Vodafone Idea had in November said that several parties have indicated a potential interest in acquiring the company’s fibre network, consisting of more than 156,000km of intra- and inter-city fibre routes. Vodafone Idea has a combined portfolio of around 233,000km of optical fibre cable post elimination of common routes.
Rival Reliance Jio too said in January that it proposes to transfer its fibre and tower businesses to separate companies and enter into arrangements for long-term use of these assets.
“First, let’s get the Vodafone thing going, then we will see after that," Mittal said on whether he would invite Reliance Jio to pool fibre as well. “The more the merrier."
The writer is attending Mobile World Congress 2019 in Barcelona at the invitation of Huawei.