Though there is considerable excitement in the telecom circles as India kicks off its first ever auction of 5G spectrum, an unreasonably high reserve price set by the government could be a dampening factor. It seems that the Centre is driven more by the impulse of revenue maximisation in the 5G airwaves auction. Striking a balance between revenue generation and the long-term sustainability of the telecom sector is crucial. Four entities – Reliance Jio, Bharti Airtel, Vodafone Idea and Adani Data Networks – are battling for a total of 72 GHz (Gigahertz) of airwaves across 10 bands, worth Rs 4.30 lakh crore.
While the government stands to rake in Rs 4.3 lakh crore if all spectrum is sold at reserve prices with a validity of 20 years, the reality, however, is that it can expect the proceeds in the range of Rs 1.50 lakh crore, given that there are only two major bidders – Jio and Airtel – and ample spectrum available. It is expected that the mid and high band spectrum will be utilised by telecom service providers to roll out 5G technology-based services capable of providing speed and capacities which would be about 10 times higher than the current 4G services. Assuming that both Jio and Bharti Airtel bid to the maximum extent allowed, there would still be enough spectrum left for other players to bid. The telecom industry has been pushing for over 90 percent reduction in the base price as spectrum prices in India are very high compared with global benchmarks. Even as the government rolls out the 5G spectrum in many parts of the country, 3G and 4G networks are yet to properly operate. The telecom ministry should look into this. Even in Arunachal, in various parts, still now there is no proper internet connectivity.