As per the task force set up by the Ministry of Finance (MoF), 5G spectrum price suggested by the Department of Telecommunications (DoT) is too high. In this regard, the task force has recommended rationalising of prices for making the next generation services affordable for all.
The industry has unanimously raised the issue of high spectrum price. However, DoT adopted the spectrum rate as recommended by the Telecom Regulatory Authority of India (TRAI).
The task force, in its report acknowledged the stress persisting in the telecom sector and said the Supreme Court (SC) judgment mandating firms to pay around Rs 1.35 trillion has placed some operators in a “precarious position”. Further, it stated that DoT has suggested a base price of Rs 4.92 billion per MHz for the upcoming auction of 5G airwaves, which is very high compared to other countries.
The report also noted that lower penetration of digital infrastructure in rural areas and slow data speeds have restricted the full potential of digital technologies such as internet of things (IoT), cloud computing and artificial intelligence and recommended measures to address these issues.
Highlighting on the telecom infrastructure requirements, the task force added that additional telecom towers need to be installed to increase coverage in rural or non-metros and to increase capacity in metros. Currently, India has around 550,000 towers and the industry believes the country will require additional around 100,000 towers per year over the next 2-3 years to meet the estimated demand.
The task force said only about 25-30 per cent of telecom towers are connected through optical fibres and India will need to fiberise over 50-60 per cent of its towers ideally before launching 5G, which needs quick approval by state authorities for laying fibre, especially in metros and Tier I cities. As per industry estimates, an additional one million towers need to be established and 3 million kilometer of optical fibre cable (OFC) needs to be laid by 2025. Typically, about Rs 5 million is the required investment for setting up a tower.
According to the report, overall capital expenditure of Rs 3.09 trillion would be incurred by both the centre and states for fiscals 2020-25 to boost telecom infrastructure. The task force estimates private players’ capital expenditure during the period to be around Rs 2.28 trillion.