Parliamentary Panel Rebukes Govt Over Delay In 5G Rollout & Higher Spectrum Pricing

A Parliamentary panel has expressed concerns regarding delay in the rollout of 5G in the country.

The issues were conveyed in a report filed by the Standing Committee on Communications and Information Technology.

The report highlighted that the delay would deprive the country of key advantages of 5G rollout, adding that other nations had made noticeable progress in the deployment of the technology.

The report stated, “It is high time that 5G should be rolled out in India in some specific Use Cases, however, the Committee do(es) not see any progress in that direction. The Committee, therefore, reiterates that the Department needs to review all their policies relating to 5G so that the country is not left behind in the race for 5G.”

The panel also impressed upon the Centre to direct Telecom Regulatory Authority of India (TRAI) to expedite their recommendations on the 5G spectrum so that auction can be held at the earliest.

Costly Spectrum Pricing

Another demand raised by the Standing Committee pertained to the high spectrum price of 5G.

The panel noted that, “The Committee had recommended the Department (DoT) to look into the issue of high spectrum price and come out with a convincing spectrum pricing policy that is sustainable, affordable and acceptable to all.”

The panel further added that the pricing of the 5G spectrum in India was ‘exorbitantly high’ compared to other nations. It also called for basing the spectrum price on factors such as ARPU (average revenue per user) in the country.

Average Revenue Per User (ARPU) refers to the average amount of revenue generated by each active user of the telecom companies over a given period of time. In the recently released Q2 report, Airtel’s ARPU for the quarter stood at INR 153. In comparison, Jio reported an ARPU of INR 151.6 in Q3 FY22.

In stern words, the committee members called on the government to take note of the issues raised by the telcos.

Industry body, COAI, was quoted in the report as saying that TRAI recommended INR 492 Cr per megahertz as the reserved price for spectrum in the range of 3300 MHz-3600 MHz for 5G rollout. COAI pointed out that the price tag was ‘far higher’ compared to other nations.

Drawing a comparison, the industry body said that per unit pricing of 5G spectrum in India was seven times costlier than the UK, 14 times expensive as compared to Australia, 35 times higher than what the Spanish government set and as much as 70 times costlier than pricing in Austria.

Bharti Airtel also criticised the move saying that TRAI’s recommended spectrum price tag ranged from 3-70 times of the market-determined pricing in absolute terms in other countries and nearly 16 times in relative terms.

The panel further added that high pricing shouldn’t negatively effect the sector in the long term. The report noted that, “Considering the stress in the telecom sector, high spectrum price will have a detrimental effect on TSPs (Telecom Service Providers) to fully roll out 5G in the country.”

Panel Demands Rationalisation Of Levies

The panel also called on the government to give due attention to telcos’ demands for rationalisation of levies and duties..

TSPs have been raising the issue time and again, urging the Centre to consider their demands such as providing soft loans against GST import line credit, reducing spectrum usage charges by 5% and slashing licence fees from 8 to 3%.

This comes at a time when the telecom sector has been witnessing a major churn, with the sector more or less inching towards a duopoly. The matter has been compounded by falling ARPUs and reduced subscriber count.

In the recent data issued by TRAI, the number of wireless subscribers in the country registered a massive slump in December of 2021. India’s total wireless subscribers during the period decreased from 1,167.50 Mn in November, 2021 to 1,154.62 Mn in December, last year. 

With 5G just round the corner, the telcos are running from pillar to post seeking reprieve. Add to that, a higher price band for spectrum could leave companies scrounging for liquidity which could complicate matters for these players.