5G spectrum sale: Trai dials experts worldwide

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Bands that are being considered include 700 MHz, which did not find any takers last time because of the high base price of Rs 11,485 crore per MHz. Sharma refused to accept criticism about the pricing of the 700 MHz band.

India’s telecom regulator is consulting global experts on the tricky issue of determining the base price for 5G airwaves, which will likely be put on sale for the first time in India by 2020, in the absence of appropriate reference points.

“It is not a simple issue. We have to give recommendations related to reserve prices, which will become easier if we have benchmarks, trails or footprints of earlier auctions,” Telecom Regulatory Authority of India Chairman RS Sharma told ET.



The Narendra Modi-led government plans to hold a mega spectrum auction that will include bands earmarked for 5G services, the next-generation mobile network standard, which will connect anything from cars, machines to home appliances with access to the internet at faster speeds.

India plans to roll out 5G-based services in 2020, although telcos don’t want the airwaves to be auctioned before late 2019, until the associated ecosystem, including handset availability, develops and the financial condition of the operators improves.

The US and South Korea plan to sell 5G spectrum later this year, followed by Germany in early 2019 and Canada in 2020. The UK is the only major nation to have auctioned 5G airwaves so far.



The UK’s biggest mobile operators spent about £1.4 billion to acquire 5G spectrum earlier this year, with Vofdafone winning 50 MHz in the 3.4 GHz frequency band by paying £378 million and BT-owned EE getting 40 MHz paying £303 million.

“Some countries (like China) just allocate spectrum to existing players… others conduct auctions,” said Chris Lane, a senior research analyst at Bernstein in Hong Kong.

Sharma said Trai is consulting global experts to arrive at the 5G base price.

“We are trying to ensure that determination of base price is based upon certain parameters and therefore are consulting international experts for their experience,” the regulator said, refusing to share a probable timeframe by which it plans to send its views on the matter to the government.



Experts said higher frequency bands may not be appropriate for India even though they may work in other countries.

Nitin Soni, director Asia Pacific Corporate Ratings at Fitch Ratings, said South Korea and Japan are small and dense. “Therefore, they can afford to operate 5G technologiesNSE -0.69 % on higher spectrum bands. We believe that there is good case of Indian telcos to launch 5G technologies on lower band of 700 MHz, given India’s large demography,” he said.

Lane added that high frequency means the propagation of signals is poor and would need a dense network to cover the same area. If auctioned, higher frequencies should be priced less than lower frequencies.

The Department of Telecommunications had sought the regulator’s recommendations on the pricing, timing and quantum of airwaves including 5G bands to be offered to private telcos to purchase in August 2017.

Bands that are being considered include 700 MHz, which did not find any takers last time because of the high base price of Rs 11,485 crore per MHz. Sharma refused to accept criticism about the pricing of the 700 MHz band.

“We are rational in pricing,” he said and added that any price point could be viewed as a high or low, given different perspectives.