TRAI May Cut Some Base Prices For 5G – Says Fitch
World’s leading credit rating provider Fitch expects base prices for 700 Mhz and 3.3-3.6 GHz bands to come down. 5G spectrum sale is likely to be held in 2022.
According to Fitch Ratings, the leading provider of credit ratings for global capital markets, TRAI (Telecom Regulatory Authority of India) is expected to cut the base costs of coveted airwaves pertaining to the 700 Mhz and 3.3-3.6 GHz bands available. The global rating agency estimates that the 5G spectrum sale will be held next year.
We expect 5G spectrum is likely to be auctioned in 2022, and for commercial launch in 2023, and we expect the (sector) regulator to reduce the reserve price for future auctions of 700 Mhz and 3.3/3.6 GHz bands, which can be used for 5G,” Fitch Ratings expressed in a media statement on Monday.
DoT had sent a reference to TRAI last September asking to be informed of the new base prices for the auctions related to airwave bands, including 700 Mhz, 3.3-3.6 GHz, newer ones like 600 Mhz and also the mmWaves like 26 GHz and 28 GHz required for satellite services as well as 5G spectrum
Officials from Fitch say that they are hopeful about Bharti Airtel and Reliance Jio boosting their revenue as the two telecom giants are showing stable progress in both mobile and broadband sectors.
We expect Bharti and Jio’s 2022 revenue to grow by around 8%-12% and the Ebitda margins to remain stable, on growth in (their) mobile and fixed-broadband, Fitch said.
With regards to Vodafone Idea, however, the progress is not that impressive as there has been a tremendous customer base decline and despite lower regulatory taxes, its Ebitda looks to be remaining stagnant.
Deferral of regulatory dues is unlikely to be sufficient to allow Vi to improve its competitive position, given its much lower CAPEX investment and weaker network strengths. Fitch Ratings commented.
On the whole, Fitch expects the telecom industry’s monthly ARPU(average revenue per user) will increase by 15%-20% on-year as there is a high possibility of increased migration of 2G users to 4G and tariff hikes.