Cellular services, the whole spectrum

Trai's latest recommendation on auctioning additional spectrum serves as a marker for the rollout of 5G services. The country got off to a late start, but has made significant progress in spreading the latest generation of cellular services. But the promised speeds are not available. The extra radio frequency is a solution. The issue is that India's urban population density makes it more spectrum-hungry in order for its terrestrial networks to deliver internationally agreed metrics. Industry is arguing that the slice of radio frequencies coming into the cellular spectrum market may not be enough to reach optimum 5G traffic speeds. Compounding the matter is slow growth of fibre optic networks that constitute a vital part of 5G networks.

The frequency bands on sale are being offered cheaper than similar frequencies that did not find bidders last year because of a lack of device ecosystem. This is in keeping with the trend of declining spectrum prices discovered through auction. Policymakers have been trying to spur telecom investment through lower upfront costs on buying radio waves. They are also stressing improvements to spectrum use to keep prices low. Yet, there is scope for improvement with spectrum in India being expensive by international standards.

Telcos are facing an uphill climb in monetising their 5G investments. Although data subscriber numbers and per-capita data usage are rising, they are not migrating to the latest-generation cellular networks rapidly enough. Service providers have improved their realisations. However, their ability to pass on spectrum costs is limited by adoption rates of 5G services. The spectrum auction process should discover prices better for improved transmission of telecom investments. On their part, telecom operators need to be sensible in bidding for radio frequencies and pricing their services. India's special conditions in terrestrial networks rollout require a greater reliance on efficient price transmission.