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Stock up on spectrum in 5G auctions: Ericsson

New Delhi A senior executive at European telecom equipment maker Ericsson said Indian telecom service providers should buy as much spectrum as possible early in upcoming 5G auctions rather than making purchases. According to him, this will make future deployments easier and ensure that users take up 5G services faster.

“I highly recommend operators to take a large part of all the new bands that are offered. The more you have, the more possibilities you have in the future to provide well-functioning services,” said Magnus Ewerbring, Chief Technology Officer, APAC at Ericsson, which will be attractive enough. For existing 4G users to upgrade to 5G.

Ewerbring said the 5G consumer business was as high potential as the enterprise side, with 4.7 billion connections globally expected to be on 5G by 2030, from 50 million in 2020.

“We expect that by 2027, 1.2 billion smartphones to 1.3 billion subscriptions and that’s really 4G-5G. 5G penetration in India in 2027 is expected to be 39% and 4G 55%, so 94% of (the smartphone base ) on 4G or 5G”.

Carriers are preparing for upcoming spectrum auctions where the government will lay out more than 72,000MHz of airwaves across seven bands including new bands of 600MHz, 700MHz, 3.3-3.6GHz and 26GHz. Consumer demand for 5G is likely to pick up once carriers start rolling out services later this year, starting in metros and major cities.

Existing Ericsson equipment that has been installed by carriers since 2015 will be able to relay 5G signals with just software upgrades, Ewerbring said, making it an affordable way for carriers to get started even as they buy new spectrum that can carry a higher load when used up. On the other hand, support a much larger number of clients. “This is a very favorable way for operators to get into the 5G network, and then, over time, they will introduce more and more radio units and the performance will also improve,” Ewerbring noted.

The affordability factor becomes important amid estimates of brokerages purchasing backhaul spectrum by all carriers in the United States R71,000 crore, the bulk of which will be new 5G bands including 3.3-3.6GHz. Each carrier, which will have to pay RRs 31,700 crore has also been set for Pan India Airwaves at base rate level to achieve savings from 3% minimum spectrum utilization charge (SUC) and spectrum purchase fee waiver in future auctions.

Analysts at ICICI Securities said the adjustment in SUC would bring annual savings of R2,100 crore for Airtel, R1,000 crore to Vodafone Idea and R2,300 crore for Reliance Jio in Q4 FY22 for adjusted annual gross revenue (AGR). If telecom companies buy pan-India 100MHz in 3300MHz band, and pan-India 500MHz in 26GHz band, which is the cheapest band as per base price, in the next auction, then the annual revenue of the spectrum acquired in the next auction will come to R1200 crore Harti, R2,400 crore for Vodafone Idea and R100 crore to Reliance Jio.

Ewerbring has also supported telecom companies providing captive 5G networks as a service to enterprises on the ground, which over time, will integrate captive and public networks, particularly in the manufacturing, automation and logistics industries to provide seamless and secure connectivity.

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