Trai to stick to spectrum price... including that for 5G services

Barcelona: Telecom regulator Trai will stick to its recommended price for spectrum including that for 5G services, its Chairman R S Sharma said after leading telecom operators complained about high base prices for the sale of frequencies. Trai Chairman R S Sharma said that the regulator, however, has recommended various measures to lower levies on the sector to help improve the financial health of stressed operators.

"We have given reserve price recommendation and we stand by that. In fact, we have reduced prices of 700 MHz band," Sharma told reporters here. Bharti Airtel and Vodafone Idea have said that spectrum prices for proposed auction are too high and companies will be unable to participate if radio waves are sold at prices recommended by Trai. The auction is key to start the rollout of 5G services.

The Telecom Regulatory Authority of India (Trai) recommended auction of about 8,644 MHz of telecom frequencies, including those for 5G services, at an estimated total base price of Rs 4.9 lakh crore. Sharma said that the Department of Telecom has not asked any major question around spectrum pricing.

"I think the government has also sent us one query about some arithmetical layer that has been relied on. Very minor clerical. It was not about pricing but about a small amount of spectrum available in Tamil Nadu. That we have responded. Now there is no question," Sharma said.

He said that Trai has not yet received any further reference from DoT to explore prices for other spectrum band identified by high level panel for 5G services. Talking about low level of tariffs, Sharma said telecom services rates are under forbearance and it is telecom operators who fix tariffs.

"We don't fix tariff. In fact there was suggestion from telcos sometime back that tariffs are going to rock bottom so you do something around it. They said fix a floor tariff. We did a meeting with operators for about two-and-a-half hours, everybody started asking us not to get into it. If I can't do floor price then I can't do. It is for the industry to take a call," Sharma said.

Trai chairman rejected argument around low tariffs resulting in a loss to government revenue. "With regard to government revenue going down, that's not a great argument to give. It is not public policy imperative of government that consumer should pay higher so that government will get higher revenue," Sharma said.

On Tuesday Bharti Airtel Chairman Sunil Mittal had said that the government must price spectrum reasonably and lower various levies to encourage roll out of 5G services in the country at the earliest. He also warned that spectrum auction may fail and Airtel might not bid for airwaves if auctions are held at prices recommended by sector regulator Trai.

"My recommendation is government must encourage 5G coming in India rather than being late. Government can help in giving more spectrum at reasonable price," Mittal told reporters here. The Telecom Regulatory Authority of India (Trai) Monday recommended auction of about 8,644 MHz of telecom frequencies at an estimated total base price of Rs 4.9 lakh crore, which includes radiowaves for 5G services.

Mittal said for 5G every operator will require over 100 megahertz and frequencies in 3500 megahertz are likely to be preferred for the next generation services.

"DoT can keep trying. They had two failed auctions and do they want to have five more failed auctions after them. Spectrum is required, spectrum will be bought , India will get into 5G but only thing that will stand in the way is right pricing for spectrum in India," Mittal said.

He said that high spectrum prices have been fixed by the government in previous auction and high auction determined prices are then taken as base price for the next auction which has made airwaves very expensive. He said that all equipment that currently being deployed by Airtel are 5G ready but high spectrum price will come in the way of rolling out services.

"You cannot have a situation where you want to benefit Digital India and you tax the most. Let's not get into a new dialogue you see new DCC (Digital Communications Commission) policy. What you have committed, do that," Mittal said.

The government has promised reduction in levies on the telecom sector under the new telecom policy. He said the industry is building infrastructure that is required for 5G services and the government has to extend support.

Mittal said that Airtel is using Huawei equipment in India and will run 5G trials with Nokia and Huawei. When asked about security concerns raised by the US, Australia and other countries on Huawei equipment, he said, "We are not at that stage (from Indian govt side) where we see alarm bells ringing."

"In the end Huawei is a big player in the telecom space. They have gone through rough patch with US. Europe has largely taken decision that they will continue using Huawei. We are tracking this space very closely," Mittal mentioned.

Mittal said that Bharti Airtel wants to have it optical fibre company Telesonic Networks to be in place by March and it is in talks with Vodafone to join the company with its optic fibre network. Talking about current position of telecom sector, Mittal said that after two-and-a-half years of difficulties there is mixed situation with some opportunities and challenges.

"If you look at situation before Jio entered the industry, the ARPU was Rs 200 and all we need to do is get back to that. We are not saying India needs to go levels where the world is," he said. "If you get back from Rs 100 today, if you get back to Rs 200 the industry will become sustainable but Rs 300 will be an ideal situation," Mittal said.