5G in India May Not be Available for Another Two Years as DoT Discusses Auction Delay

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(Image: AFP Relaxnews)

Image for Representation (Image: AFP Relaxnews)

According to reports, the delayed 5G rollout may occur due to high base 5G spectrum price, and indecision over Huawei's involvement in Indian infra.

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5G networks in India may not arrive for at least another two years, suggests a report from earlier this week by ET Telecom. While the Covid-19 pandemic is seen as a delaying factor for many planned actions in the technology and telecom industries, reports state that the Department of Telecom held a meeting regarding spectrum auctions earlier this week, and discussed a possible delay in starting 5G auctions in India until at least 2021. If the process is delayed, it would subsequently cause delays in 5G trials and related procedures, which in turn would push back the launch of commercial 5G services until at least 2022.

Alongside a weak economy, the high base price of 5G spectrum in India, marked at Rs 492 crore per unit, is seen as a deterrent for the telecom operators in India. After having been pegged back by heavy dues under the 'adjusted gross revenue' provision, Vodafone-Idea, one of the three major telecom player in India and once the biggest by market share, has come close to considering an exit from the Indian telecom industry, as per various reports. While the other two operators, Bharti Airtel and Reliance Jio, are faring considerably better, reports suggest that all three operators consider the base price of 5G spectrum in India too high.

The ET Telecom report further suggests that a delay in 5G rollout in India may be further compounded by the indecision over the involvement of Chinese electronics giants Huawei and ZTE in India's 5G plans. So far, there have been no clear directives on whether the Chinese electronics giants are allowed to participate in helping India build its 5G infrastructure, which would involve upgrading cell towers to support the new, ultra-fast spectrum. While USA's anti-China stance has caused Huawei to face setbacks in its businesses globally, other nations have had a mixed view over allowing Huawei to provide the core technologies to enable consumer 5G services.

In India, the highly competitive telecom space has meant that most telecom operators already operate on super thin margins. Coupled with the Covid-19 pandemic and lesser disposable incomes during the crunch phases, expensive 5G data plans may not be at the top of shopping lists. Furthermore, the advantages of 5G primarily lie in industrial applications, while the advantages are only incremental for mainstream users. With these factors in mind, it now remains to be seen if the DoT officially pushes back the 5G rollout by one year. While this would risk India to fall behind major nations worldwide, it does seem like a plausible step forward taking multiple factors together.

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