In Short:
Telecom companies are asking for a 50% reduction in the base price of new high frequency spectrum bands to lower costs. They want the reserve price to be set considering the high network deployment costs. The spectrum bands in the 40GHz range will be auctioned for the first time in India, making 4,000 MHz available for future 5G services. Operators have different suggestions on payment structures and rollout obligations.
Telecom Companies Seek Price Reduction for High-Frequency Spectrum Bands
Background
Telecom companies have requested a 50% reduction in the reserve price of the newly identified high frequency spectrum ranges in the 40GHz band. This request is based on the higher cost associated with building terrestrial networks in higher frequency ranges.
Key Points
- This is the first time that the spectrum bands in 37-37.5 GHz, 37.5-40 GHz, and 42.5-43.5 GHz are being proposed for auction, providing 4,000 Mhz spectrum for future 5G services.
- Reliance Jio’s President, Udai Kumar Srivastava, emphasized the significantly higher cost of deploying a network in the millimeter band radio compared to current spectrum bands.
- Bharti Airtel supported Jio’s stance on reducing the base price and suggested valuing each band based on its economic value and business case.
Industry Recommendations
- Bharti Airtel suggested estimating the valuation of the new bands by considering the market value of the 26 GHz band used in the recent auction.
- Experts highlighted the potential benefits of utilizing a combination of both high-frequency and mid-band spectrum for network rollouts.
Operator Perspectives
- Vodafone Idea expressed caution about auctioning higher frequency bands at this stage, citing the need for further ecosystem development.
- Airtel proposed a moratorium and installment payment plan for spectrum acquisition, while Jio favored upfront payment with a moratorium.
- Tata Communications recommended opening the auction to ISP license holders for smaller regions instead of circle-wise allocation.
