The Indian government is auctioning 5G spectrum this year. Will the outcome be as disastrous as last year?

Editor's note of Leifeng.com: Last year, India conducted the largest spectrum auction in its history, but the auction results were far from expectations: a total of 657.8 billion rupees (about 9.8 billion U.S. dollars) were raised at the auction, and the expected target was 5.6 trillion rupees (about 83.9 billion U.S. dollars). This year, the Indian government's auction of 5G spectrum is on the agenda. Will the outcome be as tragic as last year?

India telecom signal station

According to foreign media reports, the Indian government has announced that it will auction 5G spectrum this year to ensure that the country's telecom operators can use these specifications in a timely manner to use relevant radio waves for 5G technology.

The Indian government said that the 5G spectrum it plans to auction includes not only the 3GHz band, but also the 700MHz band that failed to be sold successfully in last year's spectrum auction. In addition, the 800MHz, 900MHz, 1800MHz, 2.1GHz, 2.3GHz and 2.5GHz bands will also appear in this auction.

However, according to foreign media reports, Indian telecom operators are going through a difficult year. Because Reliance Jio, an operator that has just entered the market, has attracted more than 100 million users in just 170 days with its free voice calls and data traffic services. This move has put tremendous pressure on several other major operators - revenue and profits have dropped significantly:

Bharti Airtel, India's largest telecom operator, reported a 55% drop in profits in the third quarter of the current fiscal year.

Idea Cellular, India's third-largest operator, posted a loss of 479 million rupees ($72.3 million) during the same period.

Meanwhile, the entire telecom industry in India is experiencing a wave of consolidation. Bharti Airtel has successively acquired Telenor, Videocon Telecom Ltd. and Augere, while Reliance Communications, India's fifth largest operator, has acquired MTS and Aircel. Vodafone India, India's second largest operator, is in talks with Idea Cellular about a merger.

This means that telecom companies often face a difficult dilemma: whether to choose to invest in fierce competition for spectrum resources or to defend their market position. In the current situation, operators often avoid exploring or investing in new technologies.

Most importantly, the Indian market is no longer as eager for spectrum resources as it was a few years ago. Due to India's frequent spectrum activities in the past few years, many operators already have enough spectrum to support the launch of new devices.

Operators may not be too interested in the Indian government's 5G spectrum auction given the level of competition and industry debt.

In a spectrum auction that ended in October last year, the Indian government raised a total of 657.8 billion rupees (about US$9.8 billion), far below its expected target of 5.6 trillion rupees (about US$83.9 billion).

Leifeng.com (Official Account: Leifeng.com) learned that 60% of the spectrum in the last auction remains unsold. The 700 MHz band accounts for half of the unsold airwaves, and the other five bands account for the remaining half. Ironically, 700 MHz was considered the most efficient band for providing 4G services at the time, and operators had been paying attention. Although the Indian government offered 770 units in this band, operators refused to bid because the reserve price per unit was as high as 114.75 billion rupees.

Recently, Bharti Airtel has signed a Nokia 5G agreement with BSNL, a government-backed telecommunications company, in an effort to stimulate the Indian 5G market. However, there is still debate as to whether the Indian market is ready for 5G technology. According to Leifeng.com, as early as 2010, BWA (Broadband wireless access) had adopted the spectrum auction method, but it has only begun to have some impact in recent years, largely because India lacks an ecosystem for mass-market terminals. Moreover, data traffic consumption in India only became popular after Reliance Jio released related terminal equipment.

Therefore, the Indian government has great ideals, but has not taken into account the reality - the Indian market is still far behind other countries in terms of 5G layout. Therefore, even if the 5G spectrum auction plan is implemented, it will be of no use to its telecom operators.

Via Light Reading , compiled by Leifeng.com