Jio's President Points out India's Inadequate 5G Spectrum
India's second largest telecom company by subscribers Reliance Jio said on Tuesday that a spectrum auction should not be seen as a money generating mechanism, while adequate quantity of 5G radio waves should be provided to ensure the optimal exploitation of 5G technology.
"Across the industry everyone has unequivcally stated that we need to have improved spectrum prices. It should be at a reasonable price. I also think spectrum should not be looked at as a money generating structure through spectrum auction," Reliance Jio Networks President Mathew Oomen told IANS.
"I think it should be at a resonable price. That way the respective funds can have a multi-fold increase of value creation across industries. Spectrum price has to be made reasonble so that additional funds can be used to use that spectrum in most effective way."
Elaborating, Oomen said: "We need on the clarity on the size of the spectrum. In the 26, 28, 36, 37, 39 bands we should have a minimum of 400 Mhz (megahertz), ideally 800 Mhz. We need to know if that is coming. In the sub-6 Ghz (gigahertz), which is 3.5, it is iportant to have a minimum 100 Mhz. If you dont have these sizes, we will not be able deliver the experiences in 5G, as 5G is not just about low latency, it is also about speed and applications. 5G is not just a consumer technology, it is a consumer business industrial technology. But That usage will not come unless you have these bands available in so much megahertz" .
Telecom regulator (Trai) has recommended sale of 275 Mhz of spectrum in the 3.3-3.6 Ghz band, implying that individual operators could get 80-100 Mhz spectrum in this band.
Telecom Minister Ravi Shankar Prasad on Monday said at the India Mobile Congress that the government will review the spectrum prices for this year's auction. His remarks come as a relief to the debt-ridden telecom firms who have almost said no to the auction if spectrum prices of are not lowered. He said spectrum auction will be conducted in this financial year (2019-20) itself.
Apart from 4G spectrum, India is planning its first auction of 5G airwaves this year.
"A 5G device today is about 1000 dollars higher. It is all about the eco system, not just deployment. There 21 devices like that across the world. Those are in millimetres that we are still not clear when they will auction and how much. There is a lot of non-clarity on 5G which need to be removed," Oomen said.
Telecom operators have always complained that compared to the rest of the world, airwaves in India are priced exorbitantly. Bharti Airtel chairman Sunil Mittal in February said that Airtel would not buy any spectrum at the base prices suggested by the telecom regulator in the 3,300-3,600 MHz band - the first band identified for 5G in the country.
Trai has stuck to its stand that 5G airwaves be priced at Rs 492 crore per Mhz. Telcos say India's proposed pricing of 5G airwaves on a per Mhz basis is seven times higher than those in countries such as South Korea.
The government plans to sell 4G airwaves in six bands and 5G spectrum for the first time in the 3.3-3.6 Ghz band.
Broking house CLSA has said that the 5G price in India is "exorbitant" at $7 billion per 100 MHz.
"5G spectrum in India is priced at an 'exorbitant' $7 billion per 100 MHz, which is nearly four times of that in Korea, and will be big drag on companies" Internal Rate of Return (IRR), according to brokerage firm CLSA.
"Only significantly lower prices will justify above cost IRR and spectrum purchases," according to the CLSA study.
At the recommended reserve price of Rs 490 crore per Mhz, operators will have to pay about $7 billion for acquiring 100 Mhz spectrum.
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