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5G in India will be later than expected…as expected

India

The Indian government has confirmed that 5G licensing will take place sometime this calendar year, as opposed to before the end of the financial year.

This means the introduction of the next generation of mobile services will be later than many had hoped, but the industry saw it coming. Where once expectations were that 5G would hit the market in India round about now, it was already clear towards the end of last year that the allocation of spectrum was unlikely to be imminent and therefore services would be delayed. It now looks like it will be another year before 5G is available, or thereabouts.

The news came via the Indian government’s Union Budget for 2022, which was published on Tuesday. In a statement sharing details of the budget, Minister of Finance and Corporate Affairs Nirmala Sitharaman highlighted the growth and employment opportunities facilitated by 5G, but said simply that spectrum auctions would be held this year to enable telcos to roll out 5G services in the 2022-2023 period.

Technically, that suggests that services could be ready to go before the end of this year, but with no concrete dates or timescales for the frequency auction, a year-end launch seems like a tall order, although not impossible.

The paperwork for the auction is not yet complete. Back in November, Communications Minister Ashwini Vaishnaw disclosed that the Telecom Regulatory Authority of India (TRAI) was still holding consultations into the auction process and soliciting opinions on the subject, and as a result was unlikely to submit its final report until well into 2022. As expected, we haven’t had it yet, and today’s budget announcement didn’t provide any further detail. Meanwhile, the national press is reporting on the the TRAI’s ongoing deliberations around pricing the airwaves.

Usually, the government is keen to squeeze in a spectrum auction before the end of the financial year in order to book the revenue, but this time it seems unlikely to happen.

However, the state is making some moves towards protecting its own role in the 5G value chain.

“A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme,” Sitharaman’s statement said. PLI schemes are designed to both provide jobs and encourage local production in key industry sectors.

The budget also proposed allocating 5% of the annual universal service fund to aid the availability of affordable broadband and mobile services in rural and remote parts of India. In addition, it foresees the award of contracts in 2022-2023 for laying fibre in all villages via the state-backed Bharatnet broadband project, the aim being to provide access to e-services, communications and other digital resources. It expects the work to be completed by 2025.

It will be the 5G spectrum allocation that captures all the headlines though. Having been on the receiving end of last year’s telecoms reform package designed to ease many of their financial woes, including spectrum payments, India’s private mobile operators will be expected to spend big on new 5G frequencies, whenever the auction takes place.

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2 comments

    • Scott Bicheno Scott Bicheno 02/02/2022 @ 9:09 am

      Because it’s news.

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