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IT Standing Committee pulls up DoT for slow 5G roll-out, urges government to reconsider high spectrum pricing

The committee highlighted the concerns of telcos who advocated for 5G standards to be compatible with global norms.

The Parliamentary Standing Committee on Communications and Information Technology expressed concern over the delay in the launch of 5G services in India, according to its report on ‘India’s preparedness for 5G’. A delay would “deprive the country of taking advantage of various benefits of 5G when other countries have made noticeable progress in deployment of the technology,” it said.

The report details the Standing Committee’s comments on the action taken by the Department of Telecommunications (DoT) on the committee’s recommendations in the 21st report which was tabled in February 2021. The government has failed to furnish reasons as to why the 5G roll-out has not moved beyond the beginning stage, the report revealed. The DoT simply offered a list of its early initiatives instead of spelling out the reasons for the delay, it added.

“It is high time that 5G should be rolled out in India in some specific use cases, however, the committee does not see any progress in that direction. The committee, therefore, reiterates that the (DoT) needs to review all their policies relating to 5G so that the country is not left behind in the race for 5G. The committee, further, desires that TRAI (Telecom Regulatory Authority of India) may be impressed upon to expedite their recommendations on 5G spectrum so that 5G auction can be held at the earliest.” — Standing Committee Report

The 5G spectrum auction is set to be held this year as per the Union Budget for 2022-23. The committee’s report may push the government to expedite the process of rolling out 5G in India.


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Key takeaways from the Standing Committee report

Review spectrum pricing: The committee, chaired by Lok Sabha MP Shashi Tharoor, noted that the pricing of the 5G spectrum in the country is “exorbitantly high” as compared to other countries in the world. “There is a need to review the spectrum pricing by taking into account factors such as per capita and ARPU in the country,” read the report. The committee had directed the DoT to look into the issue and come out with a convincing spectrum pricing policy that is “sustainable, affordable, and acceptable to all”.

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  • Resolve COAI’s concerns: “…concerned to note that no action has been taken by the Department/TRAI on the above recommendation of the Committee,” read the report. The committee was referring to its recommendation that COAI’s (Cellular Operators Association of India) request for rationalisation of levies and duties in the telecom sector be considered earnestly. The committee observed that the DoT simply explained how TRAI evaluates spectrum and undertakes consultation with stakeholders. “However, this does not in any way indicate that the DoT and TRAI will review the spectrum pricing policy for 5G in the backdrop of high price concerns as expressed by the stakeholders,” the report outlined.
  • Consider measures floated by COAI: “As the reply of the Department is silent on concerns raised by COAI for rationalization of levies and duties on telecom sector, such as providing soft loans against GST import line credit due to operator, reducing spectrum usage charge by five per cent and license fees from eight to three per cent, the Committee impress upon DoT/TRAI to look into these issues for amicable solution to mutual advantage,” the report said. Lt. Gen. Dr. SP Kochhar, Director General, COAI, pointed out that a large chunk of the spectrum remained unsold in the last auction held in March 2021. “Hence, spectrum pricing is an area which requires a comprehensive re-look,” he said in a statement to MediaNama.

Undertake spectrum audit: “The Committee express unhappiness that the Department have not spelt out the reasons for not conducting the spectrum audit as recommended by TRAI all these years. (TRAI had recommended the need for an audit in 2015). The Committee deplore that such an important recommendation of TRAI has been overlooked by the Department,” the report said.

Accelerate development of use cases: Sufficient use cases have “still not been developed in India for successful implementation of 5G” the report said while observing that the pace at which use cases was being developed is rather slow and “does not match the pace at which technology is moving”. The DoT has been asked to provide incentives and support to expedite the development of Use Case Labs currently under development. It has also been asked to furnish the status of the development of 5G Use Cases in the country in comparison with the progress of other countries, as per the report.

Harmonise Indian standards for 5G with global norms:  “The Committee find the reply of the Department evasive which does not in any way assure the Committee that DoT/TRAI are making efforts to address the concerns raised by TSPs and COAI with regard to adoption of TSDS RIT,” the report said. “If the concerns of the TSPs and COAI are to be believed then the adoption of such India-specific standards is going to have disastrous consequences for the country,” it added. The committee also noted that experts have brushed aside these concerns and maintained that they are “unfounded and misplaced”.

Why is the committee concerned about high spectrum prices?

Steep prices for spectrum in the country will be unsustainable and may have a long-term negative impact on the telecom sector, the committee reasoned in its report.

“Considering the stress in the telecom sector, high spectrum price will have a detrimental effect on TSPs to fully roll out 5G in the country. The committee reiterates that the concerns of the TSPs (Telecom Service Providers) with regard to spectrum pricing in the country are given due attention.” — Standing Committee Report

The report added that the government should ensure that spectrum pricing does not aggravate the financial burden of telecom operators and deter them from adopting 5G.

What are some of the measures proposed by COAI?

Here are some of the steps outlined by COAI for the government’s consideration:

  • Align spectrum valuation with the international benchmarks and in view of low level of ARPU (Average Revenue Per User)/RoCE (Return on Capital Employed) in the country.
  • Keep Reserve Price (the lowest price at which a seller is willing to sell an item) substantially low to enable competitive bidding and market-driven price discovery. It should be fixed at 50 percent of the valuation of the spectrum.
  • Extend moratorium period of six years (Two years beyond the completion of four years’ existing moratorium as per the government reforms announced in 2021) in the upcoming auction.
  • Remove requirement for upfront payment for the upcoming 5G auction.
  • Align the interest on annual spectrum payments (to be paid for 5G spectrum) with the Repo rate.

Address Right of Way (RoW) challenges

Lt. Gen. Kochhar said that there are RoW-related issues with regard to the deployment of telecom infrastructure across the country which results in delays. He recommended that cabinet approval is “needed to enforce RoW Rules of 2016 across central departments, states and local bodies.”

He called for an amendment in the RoW Rules to include provisions for using street furniture for the deployment of small cells and aerial fibre. Road restoration and pole charges, safety and security, etc., of the infrastructure, should be added to the RoW Rules, Lt. Gen. Kochhar recommended.

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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