Airtel is not buying 5G spectrum. Here’s why

“TRAI has suggested price of Rs 492 crore per megahertz for 5G spectrum, which Airtel feels are feels is exorbitant”

Airtel has decided not to participate in the 5G spectrum sale at the TRAI recommended prices. The telco feels that the prices set by Telecom Regulatory Authority of India (TRAI) are exuberant, which it can’t afford.” The spectrum has been priced at Rs 492 crore per megahertz, which TRAI says will not be reduced and operators should purchase them at the recommended prices only. “On the 3.5GHz band, Trai has recommended price to Rs 50,000 crore for 100MHz of spectrum. 5G requires a large block of the spectrum. 100MHz spectrum for Rs 50,000 crore, we can’t afford. We believe it is too high. We will not pick it up at those prices,” said Gopal Vittal, Bharti Airtel MD and CEO, to PTI.

Not just Airtel, Vodafone also feels the prices are on the higher side. Both telcos were recently hit by AGR dues of up to Rs 53,000 crores, taking their overall debt to over Rs 1 lakh crore. The telcos are also urging TRAI to increase tariffs so that the ARPU (Average Revenue Per Consumer) can go past Rs 200. It’s worth mentioning that Airtel, Vodafone, and Jio had revised their tariffs back in November.

“We have ARPU of Rs 135. In the end state, I think we need to see ARPU of Rs 300 in Indian telecom. I think that is when we will turn a reasonable return of capital on the overall business,” Vittal further added. With the telco backing out, the rollout of 5G cellular connectivity in India could be delayed. The same thing happened with 4G in the early 2010s. TRAI, meanwhile, is aiming to accumulate a minimum of Rs 9,840 crore from the sale of 5G spectrum in 3,300-3,600MHz band pan-India.