India will auction 5G airwaves by the end of July when three private-sector operators — Reliance Jio Infocomm Ltd., Bharti Airtel Ltd. and Vodafone Idea Ltd. — are expected to compete as they gear up to roll out ultra-speedy networks.
The federal government plans to sell 72 gigahertz of telecom spectrum for a 20-year tenure, according to a statement from the Ministry of Communications. The auction will be held for airwaves in various frequency bands ranging from 600 megahertz to 26 gigahertz.
“It is expected that the mid and high band spectrum will be utilized by telecom service providers to roll-out of 5G technology-based services,” the ministry said in the statement, without specifying how much the government is looking to collect through the sale.
The airwaves auction will help the Narendra Modi-led government boost the exchequer at a time when it will be footing a $26 billion inflation-fighting fiscal package that includes lower fuel taxes and import levies. The spectrum sale will also be the next battlefield for billionaires Mukesh Ambani’s Reliance Jio, Sunil Mittal-helmed Bharti and Vodafone Group Plc’s India unit which are planning to launch 5G networks and sign up high-end subscribers.
The latest auction, however, may not see the kind of intense, competitive bidding witnessed in the last decade when Reliance Jio was prepping to launch its services. Ambani’s disruptive entrant debuted in 2016 with free calls and ultra-cheap data, triggering a bruising tariff war. That forced rivals to quit, merge or go bankrupt and shriveled the sector from a dozen players to just three private sector operators now.
Ravaged by the cut-throat price competition and the back-dues the government demanded in the past few years, Indian telecom operators have been petitioning to reduce the 5G spectrum’s floor prices. Affordable 5G airwaves will help telecom companies invest in expanding services and ensuring faster network speeds, Mittal, chairman of Bharti Airtel, said in April.
Local lobby, the Cellular Operators Association of India, warned in August that the country risks lagging in the rollout of 5G networks unless the government makes the airwaves cheaper. India is trying to catch up with other Asian countries such as South Korea and China which have had 5G networks for years.
The actual auction collection will depend on how much spectrum is sold and how competitive the operators get.
Ambani’s conglomerate, which owns Reliance Jio — India’s biggest wireless operator — has already agreed to pay $3 billion for streaming rights of a coveted cricket league earlier this week.