Bharti Airtel’s CEO called on India’s telecoms regulator to speed up spectrum allocation and reduce costs for operators, as MNOs look to deliver the next step in the country’s digital revolution
Indian mobile network operators (MNOs) will require over 1,000MHz of spectrum each, in order to deliver comprehensive and wide reaching next generation network services across the country, according to the CEO of one of India’s biggest operators.
Speaking exclusively at the ET Telecom 5G Congress event in New Delhi on Thursday, Gopal Vittal, CEO of Bharti Airtel, said that the India’s telecoms regulatory authorities had work to do in terms of making adequate spectrum available.
“Indian operators need 1,000MHz of spectrum, each, in order to do 5G properly. There is a lot of work to be done freeing up mmWave spectrum in the high bands. Even when you talk about spectrum in the mid band, the 3.5GHz spectrum, every operator is going to need 75-100MHz of spectrum, otherwise you will see a 5G icon displayed on your phone, but in reality you will just be getting a 4G experience,” he said.
Vittal called on regulators to make spectrum available in a timely and cost-effective manner, in order to help India’s MNOs deliver on their 5G pledges.
“This must not be about revenue maximisation. This is about building a strong digital footprint for the country. The cost of the spectrum needs to come down.
“In many parts of India, you can’t go with fibre. You need microwave spectrum to deal with the backhaul of the very large quantities of traffic that are going to be involved with 5G. For that, there is microwave spectrum sitting with the government in the E-band. This needs to be allocated. It is criminal that it is just sitting there, unallocated. This is degrading the quality of the experience that the industry is able to deliver,” he added.
The cost of 5G in India
It is no secret that India’s MNOs are struggling with the exorbitant capex demands of 5G, as they try to raise funds in one of the world’s most competitive marketplaces.
Vittal bemoaned the cost of doing business in India and said that the government must do more to help operators compete.
“The cost of doing business here has to come down. The spectrum usage charges, the taxes, the litigation that the industry is subjected to, the USO fund that is just sitting with the government unused, are all constraining the industry,” he said.
“If you look at the investment that we are making for 4G, for every 100 rupees that we earn, we spend 34 rupees on capex. For most other companies in this industry, that figure would be closer to 16 or 17 rupees.
“An additional 31 rupees goes to the government for tax. This is a broken situation and we need to fix this,” he said.
All of the operators in India are struggling with extremely low average revenue per user (ARPU) figures and are trying to balance the potential long term financial gains that 5G will bring, with some astronomic capital expenditure demands in the short term.
Vittal said that India’s Department of Telecoms, along with the Telecoms Regulatory Authority of India (TRAI) must look at strategies to lessen the financial burdens on Indian telcos.
“The industry average ARPU 3 or 4 years ago stood at around 400 rupees. Now it’s 105 rupees. We need a situation where the cost of doing business goes down. Margins are absurdly low at the moment.
“Current conditions are unsustainable. If ARPU is just increased from around $1.50 to around $3.00, which is not a huge increase in terms of consumer cost, that would totally change the game for us,” he added.
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