- As reported in the newspapers, the long-delayed 5G auction got some much-needed fillip with the announcement of a set of recommendations from the office of the Telecom Regulatory Authority of India (TRAI) recently. We all know the technology leap expected from embracing the cutting-edge 5G spectrum in the telecommunication sector is going to be a game-changer with underlying expectations to boost the economy in a big way. The highlight of the recommendation is a pivot from designing the auction as a revenue maximization exercise for the Government of India, which was accomplished via resorting to high floor pries and a conservative spectrum usage policy.
PC: PIT
- Most hearteningly, the emphasis now is on lowering the floor price, or reserve price, for bidders. Such a move is not only pragmatic in its ability to attract competitors but also should eventually translate into cheaper services subsequently. Also, it has been complemented by liberal conditions on usage and surrender of the spectrum as well. Needless to mention, scrutiny of the recommendations will reveal that the thrust is in the right direction benefiting all concerned stakeholders. We know that the transition to 5G is unlike anything experienced earlier. And the mere thought of what it could be when the 5G makes its presence felt evokes exhilarating anticipation amongst the people closely following the subject.
- Moreover, 5G is an intrinsic requirement to help India’s economic structure evolve on expected lines. Remember, manufacturing is increasingly based on tools such as Artificial Intelligence (AI) and machine learning. Therefore, the speed and cost of the 5G rollout will have a strong bearing on India’s overall economic competitiveness. As mentioned above, the TRAI’s pivot to lowering the cost of the rollout by reducing the reserve price of critical frequencies by up to 40% in relation to what it had recommended four years ago is important not just for telcos but a lot of other industries. These recommendations eventually need the seal of the political executive but the direction set by TRAI is unlikely to change.
PC: Rathinam College
- Nonetheless, lowering the cost of the 5G rollout is essential but not enough to ensure that we have an ideal telecom environment. The nation is witness to how telecom players have struggled to stay relevant in the face of a highly competitive environment prevailing. Thus, a competitive telecom market that is beneficial for the overall health of the nation’s economy is necessary to spur connectivity innovations. India’s telecom market is veering towards a de facto duopoly, with the Government supported Vodafone’s future capabilities still uncertain. Therefore, a successful 5G rollout will require commitments that Vodafone may find forbidding. And, the Government needs to be flexible about policy to ensure that not less than three firms are in a position to compete hard and fair. Encouraging more telecom entrants to participate will only compel healthy competition as well. A reminder is not out of place as foreign players are rightly apprehensive of India’s telecom sector. It is imperative the Government clears those apprehensions.
