Telecom operators are going to receive a six-month extension from the Department of Telecommunications to conduct 5G trials. Now, Reliance Jio, Vodafone Idea and Bharti Airtel have time till May 26 to conduct trials. Permits for conducting trails were drawing to an end on November 26, but industry experts believed that the 5G ecosystem needed more time to test out various services.
DoT allocated 5G trial spectrum to telcos six months ago, in the 3.5 GHz, 26 GHz and 700 Mhz bands. This spectrum is being used by telecom operators to develop and test a variety of India-specific use cases either on their own or through strategic partnerships and alliances.
Experts believe that this is likely to delay 5G spectrum auctions, which are scheduled to be held in between the January-March period as well. According to an expert who spoke to BusinessLine on conditions of anonymity, a delay in spectrum auction is likely to be beneficial for Bharti Airtel. “Investors will prefer 5G spectrum auctions to occur after a year or so.” said the anonymous source. “Right now, Bharti’s balance sheet is slowly improving since the past few quarters, as cash flows are growing. The net debt to EBITDA ratio needs to improve further before it will be favourable for Airtel to participate in 5G auctions, where they will accumulate more debt.” they continued.
Experts also believe that with a nearly debt-free balance sheet, spectrum auction would have been in Reliance Jio’s favour since they are much better placed to buy 5G spectrum and could use this as an opportunity to differentiate themselves from other telcos.
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The DoT is also working with the Telecom Regulatory Authority India, to seek the base price recommendations. According to the recent reserve price, telcos would need to pay ₹50,000 crore to acquire 100 MHz of 5G spectrum in the 3.3-3.6 GHz band, which is needed on average to deploy 5G tech. Telcos state that the price is too high and hope that the regulator works on it.
Meanwhile, Vodafone Idea Limited on Wednesday said that along with its technology partner, Nokia, it has successfully conducted a 5G trial to provide rural broadband connectivity in Gandhinagar in Gujarat.
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