India’s 5G spectrum auction may consider missed bids as a joke by operators for broadcast with private networks

India’s telecom giants are likely to put down bids in the 5G spectrum auction in July, due to fears they will lose around 40% of potential revenue due to the allocation of some waves. for businesses to private networks, industry sources said.

Top players Reliance Jio and opponents Bharti Airtel and Vodafone idea failed to lobby New Delhi to stop the allocation that would allow various businesses, including Amazon and Tata consulting serviceto get airwaves without auction.

“The telecommunication companies are quite upset, it is estimated that there will be about 40% potential 5G SP Kochhar, general manager of Network Operators Association of India, which represents the three telecom companies, said.

They are taking into account business demand to justify multibillion-dollar investments as adoption by price-conscious retail consumers slows, Kochhar added.

“It was a huge disappointment.”

Five other telecom industry executives told Reuters.

Reliance, Airtel and Vodafone did not respond to Reuters emails requesting comment.

However, the government has said that allowing private networks, as in South Korea and Germany, will spur the innovation of automation and other technologies in places like factories or ports without worry. about bandwidth or latency issues.

The Broadband India Forum (BIF), which represents tech companies like Tata Consultancy and Amazon, has said private 5G networks will accelerate digital transformation.

‘RISK OF FAILURE’

The Omdia research team said this month that the Omdia research team said the launch of 5G services in the world’s No. 2 mobile market after China was a “turning point” for the country and the global 5G market. bridge.

About 50% of India’s businesses want to start using 5G within 12 months, and private network providers are in demand, Omdia said in its report.

Analysts at India’s IIFL Securities flagged a “dilution risk to telecom companies’ 5G-linked profits from businesses”.

Telecom companies have complained about the “too high” base price of 5G spectrum, which is considered one of the highest in the world.

And now with private networks expected to cut off on demand, telecom giants are likely to bid on only 4 out of 10 bands on offer for an estimated $9 billion ( around Rs 700), IIFL said.

Industry group GSMA said the overall cost of spectrum in India as a percentage of telecom carriers’ annual recurring revenue stood at 32%, the highest in the world.

The bleak outlook emerged as Airtel and Vodafone struggled with a price war sparked by Reliance in 2016.

Airtel and Vodafone have reported losses in recent years, also squeezed by spectrum fees to the government, although the recent rise in mobile data prices has begun to slowly help at least the former gain. profit.

NETWORK CAPTIVE

The potential loss to telecom companies is a boon for companies that are planning to introduce their own 5G network service. Globally, more than two dozen countries have paved the way for such networks.

India says there will be no entry or licensing fees for 10-year licenses for private networks, which can be built by companies with a net worth of over Rs. 1 billion.

They will have to pay a registration fee of Rs. 50,000. It is not clear if there will be any other fees.

Spectrum will be assigned after “research of needs” and clear regulations.

The government aims to start rolling out 5G – which can deliver data speeds much faster than 4G – in the spring of 2023.

A public telecommunications network will optimize the needs of the masses, the BIF said, but the various needs of a business “can only be achieved through dedicated fixed 5G private networks”.

“Private 5G networks offer India a great opportunity to catch up with the world,” the BIF said in a statement in June.