Cellular Operators Association of India (COAI) has urged the Telecom Regulatory Authority of India (TRAI) to revisit its 5G spectrum pricing recommendations. As per COAI, given the recent seminal reforms for the telecom sector announced by the government of India, these recommendations are one step backwards than forward towards building a digitally connected India.
The spectrum pricing recommended by TRAI is too high. Throughout the consultation process, industry had presented extensive arguments based on global research and benchmarks, for significant reduction in spectrum prices. Industry recommended 90 per cent lower price but as per the recent release, TRAI slashed the prices by about 35-40 per cent only.
Meanwhile, COAI further notes that despite the government’s decision to allocate 5G spectrum for a period of 30 years, the TRAI has decided to recommend reserve prices for 20 years and applied 1.5 times multiple to the price if spectrum is to be taken for 30 years. If one were to look at the pan-India price of 3.5 GHz spectrum, then we are back to square one with effectively no change and will nullify the relief provided by union cabinet in the year 2021. This defies logic and calls for lower spectrum prices by the industry and intelligentsia to keep spectrum prices lower to enable the industry in aggressive network rollouts that will require massive investments.
COAI also asserts that by introducing mandatory rollout obligations for 5G networks without even factoring the huge cost of such rollout, the TRAI has delinked itself from reality and is running counter to the government’s efforts of enhancing ease of doing business. As per COAI, it’s best to let the service providers be the judge for rollout of networks based on market dynamics. No operator invests in large quantum of spectrum and network capital expenditure (capex) and operational expenditure (opex) without a clear monetisation roadmap and the companies are answerable to their investors and stakeholders.
Also, by allowing private captive networks for enterprises, TRAI is dramatically altering the industry dynamics and hurting the financial health of the industry rather than improving it. Telecom service provider (TSPs) have and going forward will invest huge amount of money in network rollouts. Enterprise services constitute 30-40 per cent of the industry’s overall revenues. Private networks once again disincentivises the telecom industry to invest in networks and continue paying high levies and taxes.
Recommending TRAI to revisit its spectrum pricing, COAI asserts that the industry strongly believes there is enough and more headroom available to reduce spectrum prices by 90 per cent, in line with global norms. COAI recommends TRAI to do away with the 1.5 times price multiple for 30 years spectrum allocation. In addition, COAI has also urged TRAI to do away with the minimum rollout obligations as this is a retrograde step as the industry must be empowered to decide its rollout strategy once it has acquired spectrum at the said price. The association has urged TRAI to disallow private enterprise networks for the financial viability and orderly growth of the telecom industry, which is more than capable of delivering these services to businesses.
