Mobile operators are not allowed to participate in the next 5G frequency auction if wave prices are “too high,” said Friday the world rating agency Fitch.
Fitch said the new telecoms policy – the National Digital Communications Policy 2018 – should encourage companies to invest more in 5G frequencies, but could increase their already heavily indebted balance sheets over the next two years, depending on the substance price. 5G spectrum. “.
Telecom Secretary Aruna Sundararajan said last week that the sale of the 5G spectrum is expected to take place in the second half of 2019.
According to Fitch, intense competition has restricted the price power of telecom operators and led to overfishing of balance sheets.
However, the credit rating agency expects price competition to weaken in the medium term to three major telecoms operators – Vodafone Idea, Airtel and Reliance Jio – with an estimated 90% or more revenue share.
Fitch also expects the new Telecommunications Directive to benefit Vodafone Idea, Airtel and Jio as it promotes “more efficient use of the spectrum” by providing harmonized and contiguous frequency bands and further liberalizing the spectrum. Frequency allocation and exchange.
“Accelerating 5G deployment, extending spectrum and tuning would help telecoms companies keep pace with growing data usage,” said Fitch.
Earlier this week, the Cabinet passed the new telecommunications policy aimed at creating four million jobs, investing $ 100 billion in the industry by 2022 and contributing 6% of the sector in 2017, 8% of GDP supporting the sector Principles of net neutrality.
Telecommunications Minister Manoj Sinha said the NDCP-2018 will strengthen the telecoms sector and ensure that the troubled industry is seen not only as a source of revenue, but also as a huge boost to socioeconomic economics.
In this regard, Fitch said that the new policy could benefit the telecom sector, as it would more easily meet the growing demand for data and address the tax burden of the sector.
Telecommunications costs and burdens could be lowered by the new telecommunications policy, which aims at reviewing and rationalizing the tax structure of the sector and optimizing fixed asset pricing in the future.
“Indian operators are facing huge and diverse taxes, including royalties, frequency charges, universal service charges, and expensive radio frequencies,” Fitch said.
The government’s plans to expand broadband coverage funded by the Universal Service Bonds Fund are expected to support the growth of private operators as they expand the customer base and improve Internet usage, especially in rural areas.
Fitch said the implementation of plans to connect 6,000,000 villages with broadband, two million wireless access points in rural areas and one million in urban areas, problems, but the development of this infrastructure could significantly increase broadband rates. currently present in rural areas in low numbers. ”
Intense financial tensions have limited the pricing power of telecommunications companies, says Fitch.