India’s Department of Telecommunications (DoT) is expected to ask the country’s telecoms regulator to lower the minimum price for the auction of 5G airwaves, Indian newspaper Mint reported, citing an official with knowledge of the matter.

Local carriers have been insisting that the floor price recommended by the Telecom Regulatory Authority of India (Trai) is unaffordable and will seriously affect the launch of commercial 5G services in the country.

According to the report, DoT will also ask Trai to review the minimum price of the 700 MHz frequency band that has remained unsold in the past two spectrum auctions.

“We’ll have to go back to Trai as the situation has changed after the recent 4G auctions where the 700MHz band has remained unsold. However, it is finally up to the regulator whether they want to lower the prices,” the anonymous official was quoted as saying.

The regulator had previously set the reserve price for 5G spectrum at INR4.92 billion ($67.8) per megahertz of spectrum in the 3.3-3.6 GHz bands.

The regulator had recommended the 5G spectrum base price in August 2018. The reserve price for 5G spectrum was then accepted by the Digital Communications Commission, the highest decision-making authority at the DoT, in 2019.

The Cellular Operators Association of India has previously warned that the high reserve price for 5G frequencies would make it difficult for local carrier to take part in the 5G spectrum auction. The reserve prices set by Trai for 5G airwaves is nearly 4-6 times higher than that of the prices in other countries.

Airtel and Vodafone said that they will not participate in the spectrum auction if the reserve price was not lowered by the regulator.

The reserve prices set by Trai for 5G airwaves is nearly 4-6 times higher than that of the prices in other countries.

Earlier this month, Indian telecommunications operators committed to pay INR778 billion for additional spectrum to expand 4G across the country.

Operators acquired this additional 4G spectrum as several 4G licenses were set to expire in the short term.

Bharti Airtel said it committed a total of INR187 billion to acquire a total of 355.45 megahertz of low and mid-band spectrum.

The company noted that the low-band spectrum would help it to improve deep indoor coverage in urban environments, while strengthening its mid-band holdings, helping it to deliver 5G in a future phase.

Rival operator Vodafone Idea confirmed it had secured spectrum in five circles to help further accelerate 4G coverage and capacity in those regions.

Meanwhile, Reliance Jio has acquired 4G spectrum in 22 circles across India in the 800 MHz, 1.800 GHz and 2.3 GHz bands for a total of INR 572.2 billion, becoming the largest buyer of frequencies in the process.

As it occurred in 2016, operators did not submit offers for these frequencies due to the high price of the band. Also, spectrum in the 2.5 GHz remained unsold.

The government had lowered the reserve price for spectrum in the 700 MHz band by nearly 40% compared to the previous auction in 2016.

Airtel explained the 700 MHz band “did not get any bid from the operators as it made no economic sense for them based on the high reserve price”.

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