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Telecom industry favors 5G auction in second half of 2019
By TOG News Service
Jun 22, 2018

TOG News Service, NEW DELHI, JUNE 22, 2018: THE Cellular Operators' Association of India (COAI) today proposed that the auction of spectrum for 5G services should happen only around the second half of 2019 as it would offer telcos better visibility into market dynamics and potential revenue streams of the next-generation mobile services. The Director General of the COAI, Mr Rajan Mathews, stated that the pricing of 5G spectrum, which would be required in larger blocks or chunks than seen before, would also be a critical component for the success of such auctions. He further stated that the auctions should ideally take place in the mid to latter part of 2019.

Mr Matthews further suggested that the on-going financial stress in the industry would also have to be dealt with for the telecom operators to make investments into 5G auctions. The advent of 5G is seen as the next technological frontier, and India is positioning itself as a globally synchronised player in the design, development and manufacturing of 5G-based technology, products and application. Accordingly, the government constituted a high-level committee last year comprising secretaries of the Telecom Department, IT and Electronics Ministry and Science and Technology Department to work out the vision, mission and goals for India's 5G ambitions, and prepare a roadmap and action plan for the same. The panel is said to have recommended making available around 6,000 MHz of spectrum in nearly a dozen bands.

Moreover, the Telecom Secretary, Ms Aruna Sundararajan, had earlier said that India wants to be a frontrunner in adopting 5G technology and will prepare the roadmap for it this year. The government has also called upon industry, academia and startups to do their bit to help India take a lead in the 5th-generation wireless system which enables higher-speed mobile broadband, mission-critical services and massive Internet of Things (IoT) deployment.

Mr Mathews mentioned that the industry would take a close look at emerging use cases for 5G and government policies while evaluating auctions. He acknowledged that 5G offered a plethora of opportunities for telecom operators, but then also mentioned that outcomes and revenue streams would have to be far more defined than they are at present. Another important factor would be the financial health of the industry to be able to allow operators to afford investments in spectrum, he added. He raised an important question of as to who would lend funds to the telecom industry for affording such spectrum unless the industry was allowed to get back on its feet.

It may be mentioned that the telecom industry has run a cumulative debt of Rs 7.7 lakh crores and is facing severe financial distress. he established operators have been flagging pressure on revenue and profitability, blaming the rock-bottom data tariffs and free offerings of Reliance Jio for deteriorating financial health of the sector. The telecom operators have traded charges on multiple occasions, blaming each other for the sector's financial difficulties.