5G spectrum auctions should take place only around second half of 2019: Rajan Mathews

COAI director general Rajan Mathews said the ongoing financial stress in the telecom industry will also have to be dealt with for the telecom operators to make investments into 5G auctions.

Telecom industry body COAI has said auction of spectrum for 5G services should happen only around the second half of 2019 as it would offer telcos better visibility into market dynamics and potential revenue streams of the next-generation mobile services.

The pricing of 5G spectrum, which would be required in larger blocks or chunks than seen before, would also be a “critical component of success of these auctions” that should ideally take place in the “mid to latter part of 2019”, Cellular Operators’ Association of India (COAI) director general Rajan Mathews told PTI.

Further, the ongoing financial stress in the industry will also have to be dealt with for the telecom operators to make investments into 5G auctions, he said.

The advent of 5G is seen as the next technological frontier, and India is positioning itself as a globally synchronised player in the design, development and manufacturing of 5G-based technology, products and application.

Accordingly, the government constituted a high-level committee last year comprising secretaries of the Telecom Department, IT and Electronics Ministry and Science and Technology Department to work out the vision, mission and goals for India’s 5G ambitions, and prepare a roadmap and action plan for the same.

As per some reports, the panel is said to have recommended making available around 6,000 MHz of spectrum in nearly a dozen bands.

Telecom secretary Aruna Sundararajan had earlier said that India wants to be a front-runner in adopting 5G technology and will prepare the roadmap for it this year.

The government has also called upon industry, academia and startups to do their bit to help India take a lead in the 5th-generation wireless system which enables higher-speed mobile broadband, mission-critical services and massive Internet of Things (IoT) deployment.

Mathews said that the industry will take a close look at emerging use cases for 5G and government policies while evaluating auctions.

“Most critical things is emerging use cases...where are the best revenue opportunities...Also what is government’s national policy on 5G...e-health, e-commerce, e-governance, e-education...because government will be pushing to ensure that those are the services that will be necessary...these will be the most important aspects that the industry will watch out for,” Mathews said.

He acknowledged that 5G offers a plethora of opportunities for telecom operators, but added that outcomes and revenue streams will have to be far more defined than they are at present.

“We have to get a clearer picture on what is the emerging revenue stream that attaches to the use of the spectrum,” he emphasised.

Another important factor will be the financial health of the industry, he added.

“You also have to address the financial health of the industry to be able to allow operators to afford investments in spectrum. Unless you allow industry to get back on their feet...who is going to lend to the industry for spectrum?” Mathews added.

The industry has run a cumulative debt of Rs 7.7 lakh crore and is facing severe financial distress.

Established operators have been flagging pressure on revenue and profitability, blaming the rock-bottom data tariffs and free offerings of Reliance Jio for deteriorating financial health of the sector. The telecom operators have traded charges on multiple occasions, blaming each other for the sector’s financial difficulties.