Published: Updated On – 12:34 AM, Sat – 18 June 22
The imminent rollout of 5G services will give a major fillip to digital connectivity and boost new-age businesses but an unreasonably high reserve price set by the government could be a dampening factor. It seems that the Centre is driven by the impulse of revenue maximisation in the 5G airwaves auction, to be held in July-end. Despite pleas from telecom players for a 90% reduction in the reserve price, the NDA government is going ahead with the price levels set in 2018 and is expecting to rake in about Rs 4.50 lakh crore by auctioning a total of 72 GHz (gigahertz) of spectrum with a validity period of 20 years. The Telecom Regulatory Authority of India (TRAI) had recommended a 35-40% cut from its earlier proposed base prices for the auction. In the past too, the imposition of retrospective taxation on telecom companies and the issue of adjusted gross revenue (AGR) dues had proved to be a setback for the industry. Instead of focusing only on maximising revenues, the government must facilitate the growth and well-being of the telecom sector and the businesses associated with it. When they thrive, the tax revenues will automatically grow. There are also concerns among telecom players that they could suffer a potential loss of revenue with the government’s decision to directly allocate spectrum for enterprises to build 5G private networks. Currently, these enterprises, mostly technology companies, contribute 30-40% to the overall revenues of the telecom industry. Big tech like Google have been seeking direct allocation of spectrum for applications such as machine-to-machine communications, Internet of Things (IoT) and AI, while telecom companies have been opposing this saying it will distort the level-playing field.
The government’s decision to auction 5G airwaves will boost machine-to-machine communications, IoT and artificial intelligence (AI) across sectors including automotive, healthcare, agriculture and energy. A successful rollout of 5G services will lay the ground for a digital transformation, having wide-ranging implications for economic activity. In the last few years, digital connectivity has brought people closer in terms of communication and opened up new vistas in governance, business and economy. E-commerce, aggregation and other digital-enabled businesses have not just created unicorns but also generated a large number of jobs. Broadband, particularly its mobile version, has hugely impacted our lives. 4G services have ushered in a sea change in the way people use their mobile phones. In fact, change is so all-encompassing that the present-day scenario could not have been imagined in 1995 when mobile services began at that time. Mobile telephony is now playing a key role in bringing welfare measures to the doorstep of weaker sections. The next-generation 5G networks, which provide data speeds 20 times faster than 4G, are vital for emerging technologies like self-driving cars and AI.