Scheduling an auction of 5G airwaves in FY20, he said, would also “allow for a better understanding of the value of 5G spectrum and the resultant price to bid”.
The telecom sector wants the government to put off auction of 5G spectrum till 2019-20 to give time for a devices ecosystem to develop and allow the industry to overcome its financial stress and consolidate completely.
The government "must not rush into any spectrum auction this year" as the industry is reeling under acute financial duress, and auction of any spectrum band, including 5G, must be initiated "only once all consolidation has been announced and locked down", said Rajan Mathews, director general at Cellular Operators Association of India (COAI).
COAI is the apex industry grouping representing top telcos Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio Infocomm.
Telcos are particularly at odds with sector regulator Trai’s recent suggestion for National Telecom Policy 2018, urging the government to swiftly identify and make available new spectrum bands in the backhaul and access segments for growth of 5G networks.
"Given that regulatory and technical standards for 5G are still under deliberation at the global level, 5G spectrum should be auctioned only after the ecosystem is developed, which is why, FY2020 may be an appropriate time to do so as there will be better use cases and apps for 5G, for which at least a year to 18 months are required," Mathews told ET.
Scheduling an auction of 5G airwaves in FY20, he said, would also "allow for a better understanding of the value of 5G spectrum and the resultant price to bid".
Telcos’ reluctance to participate in another mega auction in the near term comes even as the government plans to put up a whopping 3,000 units of radio waves, including 5G bandwidth, in the next spectrum sale, timelines for which remain undecided.
Telecom secretary Aruna Sundararajan on Wednesday said spectrum supporting 5G services and fiberisation of networks would be part of National Telecom Policy 2018, which is being formulated by the telecom department, and the draft would be put out for public consultation in three weeks.
Telecom minister Manoj Sinha, too, had recently told Parliament that 5G airwaves in the 3300-3400 MHz and 3400-3600 MHz bands would be part of the next spectrum auction.
The government has sought suggestions from the Telecom Regulatory Authority of India (Trai) on the reserve price and related issues such as when the next auction of spectrum in seven frequency bands, including 5G airwaves, should be held.
A senior industry executive, who did not wish to be named, said the government should ideally allow the telecom market to settle down in the wake of recent mergers and acquisitions as it is only "post-consolidation that telecom companies would look at any additional spectrum needs after they put their networks together".
Telcos’ call to delay the next spectrum auction comes at a time when the sector is plagued by fierce price wars and saddled with debt upwards of Rs 7-lakh crore.
Over the past 15 months, incumbents Airtel, Vodafone and Idea have seen a sharp fall in their revenue and profits in the face of price competition since Jio’s entry in September 2016. This has led to consolidation in the industry, leaving Bharti Airtel, Jio and the emerging Vodafone-Idea combine as the only major private players.