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5G services may launch in October, but your mobile bills may rise sooner

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  • 5G in India is poised to become a reality now that spectrum auctions are ready.
  • However, with telecom companies buying large spectrum capacities, price hikes could be imminent, industry experts say.
  • The government’s telecom reforms are also expected to provide some relief to the common man in the form of lower 5G prices.

Now the long awaited 5G spectrum auctions are finished, analysts say telcos may announce price increases as they seek to offset some of the cost of their respective bids.

General, Trust JioAirtel, Vodafone Idea and Adani Data Networks have won a total of 51,236 MHz spectrum worth 1,50,173 crore – much higher than the government’s estimate of ₹1,10,000 crore – and more than double the amount paid by analysts estimated.

Spectrum taken over by companiesDoT / https://londonbusinessblog.com/ India / Bloom

At first glance, it appears that telcos have pushed up spectrum prices through competitive and aggressive bidding. That is far from reality, however, as most of the spectrum was sold at minimum prices. Only select circles like UP East witnessed aggressive bidding, with spectrum there rising from the minimum price of 91 crore per MHz to ₹161 crore.

According to reports, there are two reasons behind the 5G spectrum auctions exceeding the ₹1.5 lakh crore figure: Jio chooses to amplify a lot of spectrum in the 700MHz band and telcos amplify their existing legacy spectrum holdings.

“After the auctions, industry debt levels should further increase to about ₹6 lakh crore by March 31, 2023, with the addition of the spectrum obligations,” said Ankit Jain, VP & Sector Head of ICRA.

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5G in India - does the aam aadmi even need it?

5G in India – does the aam aadmi even need it?

5G in India is poised to become a reality now that spectrum auctions are ready. However, with telecom companies buying large spectrum capacities, price hikes could be imminent, industry experts say. The government’s telecom reforms are also expected to provide some relief to the common man in the form of lower 5G prices.

4% higher mobile bills or 30% more expensive 5G

According to a report from Nomura, telcos have two options to offset the extensive purchases of 5G spectrum: raise prices for their existing subscribers or launch 5G services at a premium.

The Nomura report says a 4% tariff increase today would allow telcos to pay for their 5G spectrum purchases.

Alternatively, the report says telcos can launch 5G services at a 30% premium – for example, a 5G plan at 1.5GB per day could cost ₹866 for 84 days, compared to the ₹666 plan Jio currently has. has.

The fact that a modest tariff increase would cover the telcos’ 5G spectrum bills can be attributed to the Indian government’s telecom reforms in September last year, which led to zero spectrum auctions and other measures in future spectrum auctions and other measures to alleviate the distress in the telecom sector. to decrease. industry.

If telcos still make 5G services too expensive, India’s telecoms minister said state-owned BSNL will roll out 5G “very quickly”.

That’s all good, but when will 5G services be launched in India?

India’s Telecom Minister Ashwini Vaishnaw has announced that the allocation of 5G spectrum has been accelerated, with the process to be completed by August 10 – within 9 days of the auctions closing.

“We expect the rollout to start in October, and within a year or so we should have a good rollout of 5G in the country,” he said at an investor summit yesterday.

Leading telco Reliance Jio could be the fastest to launch 5G services in India, according to a statement from the company.

“We will celebrate Azadi ka Amrit Mahotsav with a pan-India 5G rollout. Jio is committed to providing affordable world-class 5G and 5G services,” said Reliance Jio’s newly appointed Chairman Akash Ambani.

This is largely due to the massive fiber network across the country and the fact that it has an all-IP network without any legacy infrastructure. Airtel and Vodafone Idea, on the other hand, have a lot of legacy technology and subscribers to work with, so their rollouts could be a little slower.

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