A step forward

| Updated on May 07, 2021

The telecom sector must be financially well-positioned to leverage the benefits of this technology   -  istock/sarayut

The nod for 5G trials has come not a day too soon but there are issues for the Centre to iron out

After a delay of nearly two years, the Department of Telecom has finally given the green signal for conducting trials for wireless broadband services based on 5G technology. In June 2019, the DoT had first approved 5G trials putting the rollout of services on top of the agenda of the then newly-elected Narendra Modi government. However, there were multiple issues that came in the way. For instance, there was no clear roadmap of spectrum availability and 5G frequency bands aligned with the global standards. Typically, a 5G operator needs a contiguous block of 100 MHz of spectrum to offer any meaningful service. This meant the 175 MHz earmarked for 5G was grossly inadequate. This has now been resolved.

There was also no clarity on whether Chinese equipment vendors, including Huawei and ZTE, will be allowed to supply 5G gear to Indian operators. This also has now been clarified with the DoT barring Chinese vendors from the trials. While this decision has been taken from a national security point of view, its impact on the competitive landscape of the hardware segment is likely to be minimal. Over the past year, a number of Indian companies have developed 5G capabilities. The proposed trials will be a good opportunity to prove that these indigenous platforms can be viable alternatives to the Chinese vendors.

But there are three other issues that the Centre needs to sort out. There is a need to move away from the existing mechanism of pricing spectrum on a per MHz basis. If the Centre were to fix the floor price based on the per Mhz price realised in the last auction, then no operator would be able to afford 5G spectrum. Second, the Centre must address the issue of financial stress in the sector to avoid a duopoly. The Centre should help by lowering licence fees and spectrum usage charges so that telecom companies can free up capital that can then be invested in network expansion. Finally, the regulator must ensure that operators are meeting the quality of service parameters of existing 2G and 4G networks before embarking on a new 5G platform. Consumers are still grappling with issues like voice call drops and interrupted data services.

There is no doubt that 5G will bring massive improvements in broadband services and industrial applications with the potential to drastically alter societies through its impact on economic and social structures. While India cannot afford to miss out on this it is equally important to ensure that the telecom industry is well-positioned to bring the benefits of this new technology to consumers.

Published on May 07, 2021

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