The effect of this extension is that the 5G spectrum auctions are likely to be delayed until the second half of 2022, pushing the start of commercial launches out until 2023.
Despite these repeated delays, none of the major players seem particularly concerned. LTE networks still have a long way to go before nearing capacity, with one of the MNOs (state-owned company BSNL) only planning to launch 4G services in August 2022.
The country’s telecom sector is also recovering from a fierce price war that started in 2018 following the market entry of Reliance Jio. The aggressive competition saw ARPUs plummet across the board. This problem of a significant fall in revenue as compounded by the DoT’s winning of a major Supreme Court battle over the definition of Adjusted Gross Revenue (AGR) usage and licensing fees for telcos. A number of operators have been pushed to the edge of financial collapse, only for the government to come to the rescue, of sorts, in September 2021 with a very welcome relief package. Nevertheless, few of the potential bidders in the 5G spectrum auction are in a particularly healthy financial state, and the entire industry may end up benefitting from the opportunity to pause awhile.
Key Developments
The government releases a major telecom sector reform package, which includes a four-year moratorium on AGR dues and spectrum instalments.
5G spectrum auctions are postponed from 2021 to 2022.
The target completion date for India’s national broadband program BharatNet (originally scheduled for 2013) is pushed further out to 2025.
Jio develops a 100%-homegrown 5G solution for India, including radios integrated with its own 5G core network as well as Jio 5G smartphones.
BSNL announces plans to make 4G commercial services available in August 2022, following a cash injection from the government.
Bharti Airtel’s shareholders approve a deal for Google to acquire 1.28% of the company in return for a $700 million equity investment.
Vodafone Group sells a 4.7% stake in tower provider Indus Towers to Bharti Airtel.
