China Has Already Awarded 5G Licenses, While Mobile Operators in India Debate The 5G Spectrum Price
Earlier today, China has awarded 5G licenses to telecom companies and is expected to spend around $217 billion on 5G networks.
(Image: CC0 Public Domain)
Just days after after telecom minister Ravi Shankar Prasad confirmed that the trials for 5G mobile networks will begin in the next 100 days and the spectrum will be auctioned before the end of the year, the Cellular Operators Association of India (COAI) has said that the planned base price of the 5G auction is too high. This could delay the 5G rollout plans for India’s largest telecom companies, Vodafone-Idea Airtel and Reliance Jio. Today, the authorities in China have awarded the licences for 5G licenses in the country. China Mobile, China Unicom and China Telecom, as well as China Broadcasting Network, have been awarded licenses to start and run commercial 5G mobile services in the country, according to the Ministry of Industry and Information Technology (MIIT). These companies can now go ahead with full commercial deployment of 5G networks across China, and allow users to subscribe to the faster data services.
In India, the 5G process is barely underway and there are already some issues. The primary issue being the observation by cellular operators that the base price for 5G spectrum auction in India is on the higher side. The mobile service providers in India believe the price is too high. It will be a “serious impediment”, according to Rajan Mathews, director general of lobby group Cellular Operators Association of India (COAI). “The majority of our members believe the present proposed pricing of 5G spectrum is unaffordable,” Mathews has said in a brief statement to the media. He also believes that these 5G spectrum rates are higher than any other country in the world. In August 2018, the Telecom Regulatory Authority of India (TRAI) had recommended that the Department of Telecom (DoT) should auction 20 megahertz (MHz) blocks in the 3,300-3,600 MHz spectrum band, which has been lined up for 5G, at a price of Rs 492 crore per MHz.
The Telecom Minister Ravi Shankar Prasad has assured that the industry’s issues and challenges will be addressed. “I will hold a consultation with the Telecom Industry to understand their issues and challenges and we will work towards addressing those issues,” telecom minister RS Prasad has said in a tweet. The Department of Telecom (DoT) is expected to begin 5G mobile network trials in the next 100 days. Mobile service providers will have to bid for blocks of at least 20 units, so securing pan-India 5G spectrum will cost a company at least $1.42 billion at base price levels.
"These prices are exorbitant given that the state of 5G ecosystem, is still nascent. So, we would hope that the Government brings down prices of spectrum and reserve prices of spectrum, and that is the stage we would look seriously at 5G," said Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel, said during the recent earnings call.
“5G spectrum should be made available to all players at reasonable prices such that more investments are directed towards enhancing network capacity and capabilities,” Balesh Sharma, CEO, Vodafone Idea has said to the media. It has also been reported that Vodafone-Idea Ltd. believes the 5G spectrum shouldn’t be auctioned before next year.
There is a lot at stake here. Trade body GSM Association expects India will have 920 million unique mobile subscribers by 2025 which will include 88 million 5G connections. "5G connections in India are forecast to reach 88 million by 2025. This will leave India trailing regional peers such as China, which is set to see almost 30 per cent of its total connection base on 5G by 2025," the latest GSMA Intelligence report says.
Cellular companies in countries including the UK, South Korea, US and Australia have already launched initial commercial 5G services. Most recently, EE in the UK launched 5G services, while Vodafone has confirmed they will roll out 5G in July. China is now embarking on a journey which could give it the sort of scale that no other country perhaps has. "Huawei will fully support Chinese operators to build 5G [networks] with comprehensive end-to-end 5G capabilities. We believe that in the near future, China’s 5G will lead the world," Chinese technology company Huawei has said in a statement. China is expected to spend as much as 1.5 trillion yuan (around $217 billion) on 5G till the year 2025, according to the data published by the China Academy of Information and Communications Technology in March.
The 5G spectrum auctions are expected raise a lot of revenue for the government. To put this into perspective, the revenue was to the tune of Rs 65,789 crore when the latest round of spectrum auctions was completed in 2017. The next generation 5G networks are expected to provide data connectivity 20 times faster than 4G, and will handle voice traffic better as well.
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