The Digital Communications Commission, the highest body of the department of telecommunications, decided not to allot 5G spectrum directly to private companies. However, this has ruffled many feathers which may delay the whole auction process.
The technology companies have made representations to the government through their industry bodies arguing that the move could damage the process of digitisation of the economy and the prospect of making Indian products competitive in the global market.
Broadband India Forum, an industry group of technology companies like Apple, Facebook, Google, Microsoft, and others has urged the government to provide spectrum for private networks through administered allocation at nominal rates, or give it for free.
Tata Consultancy Services (TCS), India’s top information technology company, wants the government to directly allocate 5G spectrum to private enterprises, as recommended by the regulator. It ruled out participating in the upcoming 5G auction as rollout obligations make buying airwaves directly financially unviable.
Telecom operators including Reliance Jio and Bharti Airtel favour spectrum to be auctioned to licensed entities. The telcos’ view has been backed by the Department of Telecommunications (DoT) and the matter will now be decided by the Cabinet.
Infosys, India’s second-largest software developer, is planning to lease 5G spectrum in key markets to deploy private networks for large enterprise customers, practically ruling out the purchase of airwaves directly in a sale. Rivals such as Wipro and Tech Mahindra said they are also looking to partner carriers and companies as tech firms seek to participate in the next-gen technology. HCL Technologies added that it sees huge opportunities for industries leveraging the next-gen technology.
Ahead of 5G auctions, Vodafone Idea MD & CEO Ravinder Takkar has said that the telecom department should consider “allocating” spectrum that is left unsold to mobile operators at a certain market-discovered price as companies scale networks to meet the country’s growing digital consumption.
The company is looking to close in on an estimated Rs 20,000 crore in fresh funding very soon.
The only roadblock before getting the external funding — to be divided equally between debt and equity — is the wait for the government to fulfil its promise to pick up a stake in the company by converting its Rs 16,000-crore interest demand into a near 33% equity.
State-run BSNL has urged the government to allocate 10 Mhz of spectrum in the 700 Mhz band.
This mid-band is expected to play a key role in the rollout of 5G services in the country.
The 700 Mhz band is considered premium because it provides wide coverage of mobile signals and the least number of telecom towers are required for setting up a network in this band compared to other frequencies allocated to the sector at present. If the government reserves 70 Mhz of spectrum in the mid-band, then a total of 300 Mhz of spectrum will be left for players to bid for in the upcoming auction.
In good news for the telecom industry, the revenue of the Big 3 telcos—Reliance Jio, Bharti Airtel and Vodafone Idea—may rise by 20-25% in fiscal 2023, on the back of the recent tariff hikes, according to a report from Crisil.
In fiscal 2023, ARPU (average revenue per user) should grow 15-20% due to the full-year impact of tariff hikes in fiscal 2022 and fiscal 2023. Telecom operators are also expected to spend incrementally on networks and regulatory capex in fiscal 2023, which may impact the ARPU growth, and tariff hikes could ease some pressure.
The industry was in a downturn phase from FY16 due to onset of competition from Reliance Jio. However, since the industry repair phase began, revenue has started rising.