India will finally hold 5G airwave auction this year

Faster and better.
Faster and better.
Image: REUTERS/Anushree Fadnavis
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India today (Feb. 1) finally set a timeline for the auction of 5G airwaves.

In her union budget speech, finance minister Nirmala Sitharaman said the government will hold an auction for the 5G spectrum in 2022. The implementation, however, will only happen in 2023.

The minister said this next-generation mobile broadband can enable growth and offer job opportunities in India. Further outlining the priorities around the 5G tech, she announced the launch of a government scheme for design-led manufacturing in 5G.

The announcement has come as a relief for smartphone companies who will get more time to study the 5G market.

Meanwhile, this might delay the plans of companies like Reliance Jio to roll out services before the end of 2022.

Why did India delay its 5G spectrum auction?

The excitement around it notwithstanding, India has delayed its 5G spectrum auction mainly due to the financial troubles in the domestic telecom industry.

Intense competition triggered by Ambani’s Reliance has left players like Bharti Airtel and Vi struggling. Their financial woes forced both companies to raise tariffs, a move soon followed by Reliance Jio.

Their worries have forced prime minister Narendra Modi’s government to intervene. A few weeks ago, it announced various measures, including a four-year moratorium on airwaves payment dues and allowing mobile carriers to convert the interest they owe lenders to equity.

This helped free up cash to invest, as a result of which the 5G auction this year is likely to be a major bidding competition.

Airtel and Reliance Jio in India’s 5G race

So far, Reliance Jio and Bharti Airtel are leading the 5G race in India.

Jio had earlier said it will be the first to launch the services. It also claimed to be the first telecom firm in India to develop its own 5G tech.

So far, both Reliance and Airtel have upgraded their mobile towers in partnership with 5G equipment makers such as Nokia and Ericsson.

Currently, India has around a billion mobile phone users and the massive market potential has forced global tech giants like Facebook and Google to invest heavily in India.

For instance, last month Google announced investing up to $1 billion in India’s leading telco firm Airtel. The Indian company said that a larger chunk of this investment will go towards 5G service expansion.