India 5G spectrum price expensive, says Ericsson

NEW DELHI: Sweden's Ericsson has termed the 5G spectrum suggested by India’s telecom regulator as "expensive", and stressed that the country should aim for longer term economic benefits from the next gen technology even if it means lower one-time upfront revenue.

“The proposed reserve price for 5G airwaves in India is expensive, given the health of the telecom players in India. If the aim is to ensure everyone gets access to 5G, telcos need spectrum at fair and reasonable price,” Nunzio Mirtillo, head of South East Asia, Oceania and India for Ericsson, told ET.

He said that ensuring all telcos get access to 5G spectrum would yield much richer dividends for the economy through digitalisation, Internet of Things, leading to efficiencies which would eventually translate into faster income.

“So, higher income not from the first door but from the second one,” Nunzio said, explaining that government might have to forgo its one-time revenue from sale of bandwidth if it wanted speedy roll-out of the next generation technology in the country.

The Telecom Regulatory Authority of India (Trai) has recommended a starting price of Rs 492 per MHz of 5G spectrum in the 3300-3600 MHz band, which the industry says is too expensive, compared to countries like in South Korea. Despite being prodded by the Department of Telecommunications (DoT) to lower prices, the Trai has stuck to its guns. The matter will now be decided by the Digital Communications Commission (DCC), which is the highest decision-making body in the DoT.

When asked on whether barring Chinese competitors such as Huawei from supplying 5G gear would benefit the Nordic company, Nunzio said Ericsson has never relied on any “geopolitical” factor in the past nor will it rely on in future.

“It is not under our control, we just focus on ourselves. In fact, it is good to have competition,” he said.

The top executive added that that with India expected to become one of the top three largest markets in 5G technology after China and the US, companies will be required to design their technology and invest in R&D keeping the South Asian nation’s specific requirements in mind.

On Huawei’s price advantage compared with European rivals, he said, “The relation between cost competitiveness and technology is very simple. If you invest in R&D, you will also be able to cut the cost down. You don’t reduce the cost by sourcing, you reduce the cost through R&D”.

He said that Ericsson knows how price sensitive a market India us, and claimed that the Swedish company was equally competitive in pricing of 5G equipment.

Ericsson has publicly announced 23, 5G contracts globally out of which 14 have already gone live.

Nunzio also discounted views of the Trai that companies in other sectors, and not just telcos, could be interested in 5G airwaves.

“I will not really bet on it. It is very complex to manage a mobile network. I would leave the managing of the complex mobile network to ones who know how to do that (read: telcos) and then I would use it for applications,” Nunzio said.

Recently, German authorities left a significant chunk of 5G spectrum out of auctions and reserved it for other industries - car companies etc - to be able to do trials using 5G technology to examine use case in other industrial sectors.