India keen to adopt 5G early, says Telecom Secretary

The government will hold fresh spectrum auctions between July and December and the exercise will be an annual affair, Telecom Secretary J.S. Deepak said on Tuesday. The Centre is also working to ensure that India embraces 5G telecom networks in tandem with the rest of the world, unlike 3G and 4G technologies whose rollout was far slower, he said.

“We are looking to do a spectrum auction every year so that telcos can plan their needs, whether they need to trade it, buy it from someone else or come to the auction. This ensures complete certainty and policy stability,” Mr. Deepak said on the sidelines of the Mobile World Congress.

This year´s auctions are likely to be held between July and December and the Department of Telecom will send a request to TRAI for its recommendations on the spectrum to be sold, the price and newer spectrum bands that could be offered. Before July, the department will frame a policy for the use of various spectrum bands, including high frequency ones.

When asked if the industry would be interested in picking up spectrum as players like Airtel have said there is now a spectrum surplus on their hands, Mr. Deepak said, “Industry is not a monolith. One operator you spoke to may not need spectrum, but there are possibilities of other players who may want it.”

“We are putting up new bands that can be used for other applications, including 5G. Someone may now want 500 Mhz as well. And if they don’t want it, it´s okay, we will keep it,” he said.

While limited spectrum was offered in auctions till 2015, since last year, the government has started putting all the available spectrum on sale in line with a Supreme Court judgment, he said.

“Indian telecom is now like a spectrum supermarket. If a supermarket doesn’t sell all its goods in one day, it doesn’t get a heart attack or high blood pressure. It will sell the next day, next week, next month,” he pointed out. “Even if I may believe that not even 1 Mhz will sell, I will put it on sale year after year,” he added.

Gearing for 5G

While South Korea is expected to be the first country to rollout 5G network services in time for the 2018 Winter Olympics, Mr. Deepak said India is keen to be an early mover in the use of the next generation telecom technology.

“We were late in 3G and 4G and we are very keen that India should not be deprived of 5G. It is not only a communication issue, it is a productivity issue for industry. It has wider applications in smart cities and grids and all kinds of things,” he said.

“We are very keen to be with the world and have done a lot of preparation. We came out with M2M (machine to machine) guidelines in 2015 and have issued draft service providers´ guidelines on which we have got comments,” he said.

“We are also looking at issues of international roaming. If a car is manufactured in India by Tatas or Mahindras and is exported to Europe what is the cost issue and what is the international roaming issue,” he added.

The department is also framing a policy on the use of higher frequency spectrum for different purposes, including 5G services, and is expected to unveil it in the next three months.

Industry worries

Reacting to Bharti Airtel chairman Sunil Mittal´s comments that governments around the world tax telecom firms with a heavy hand, the telecom secretary said it´s difficult to ask for lower taxes as the Finance Ministry also needs revenue to spend on health, education, welfare and infrastructure.

“There can always be an issue of what is less and more. I mean, none of us is happy with the income tax rate that we pay. Yes, companies need to get spectrum and need to make money on their operations so they invest, but apart from service tax, licence fee and spectrum charges add up to less than 12%,” he pointed out.

Instead of lowering tax rates, the government is spending more from the Universal Service Obligation fund to help industry. “What was happening in the past is you are taking this USOF and not spending it on telecom. In 2015-16, we spent Rs. 3,000 crore that has been tripled to Rs. 9,000 crore and will be a minimum of Rs. 18,000 crore next year.”

“The backlog in the USO fund is being invested into various telecom infrastructure projects like Bharat Net and North east areas and so on. That will obviate the need for private investment and save them that money, is a happy and pragmatic way for both sides,” he added.