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CCI Requests Govt To Permit Adequate 5G Airwaves At Reasonable Rates To Ensure Competitive Landscape

Monday, 25 January 2021, 04:00 Hrs

The Competition Commission of India (CCI) has urged the government to ensure adequate 5G airwaves are auctioned at affordable rates amid acute financial stress in the debt-laden telecom sector. Otherwise, it said, the more profitable telecom operators could end up enjoying an unfair edge in deploying the fast mobile broadband technology in the country and make the 5G market uncompetitive.

Creating a competitive 5G market, it said, is crucial for the ultra-fast wireless broadband technology to work in India, which would require assignment of ample 5G airwaves at a reasonable cost to ensure the capital market stays interested in funding such network upgradation and expansion, including acquisition of 5G spectrum.

The antitrust watchdog also underlined in a telecom market study the criticality of ringing in greater harmonisation across the respective jurisdictions of the CCI, the Telecom Regulatory Authority of India (Trai), the Department of Telecommunications (DoT) and the future Data Protection Authority, calling for stronger informal lines of communications to ensure more robust and consistent regulatory decisions in future.

“Spectrum allocation will be key to the successful launch of 5G services in India, but the current financial health of the (telecom) sector could result in an uneven speed of 5G adoption by operators, and the more profitable ones are likely to be faster off the block than the weakened debt-ridden operators,” the CCI said, adding that such a scenario would have “implications on the level of competition” in the 5G market. Reliance Jio Infocomm is the sole profit-making private telecom carrier at present.

The CCI report said the battered financial health of the telecom industry – saddled with more than Rs 8.55 lakh-crore of debt – would hurt the ability of weaker telcos to acquire new 5G spectrum, especially since the average spectrum holdings of an Indian operator at 31 MHz is sharply lower than the 50 MHz global average. The government will auction 4G spectrum in March but is yet to clarify when 5G airwaves would be up for sale, though it is widely expected later this year.

India’s second-largest telco, Bharti Airtel, has maintained that it will give 5G spectrum a miss even if it’s auctioned this year, saying the reserve prices set by Trai make these premium airwaves unaffordable. The CCI study appeared to back this view, noting that “based on available information, 5G spectrum in India will be relatively more expensive than other countries”.

Telecom market leader, Reliance Jio, though, has been pushing the government for an early 5G auction as it has developed its own 5G technology that can be ready for field deployments this year. The company also plans to offer its 5G technology to telcos across the world, after testing and scaling it up in India. The older incumbent operators, however, say 5G spectrum prices must drop to give telcos more headroom to invest in networks and price the services affordably.

Separately, the CCI report said that while overlapping jurisdiction between institutions such as the CCI, Trai, DoT and the envisaged Data Protection Authority cannot be completely eliminated, this ought to be harmonised through better regulatory design and improved lines of communication. It said this would be critical, as there could be “potential abuse of dominance cases, which might also involve a breach of data protection rules”.