5G spectrum prices could be lowered due to a ban on Chinese vendors

5g spectrum prices could be lowered

Indian Government is likely to favor Indian Telecom companies in setting up 5G after the face-off with China. The Department of Telecommunication (DOT) is already encouraging all operators not to opt for both Chinese equipment vendors Huawei and ZTE.

After the Chinese app ban in the Indian smartphone market, there are speculations that Chinese telecommunication equipment vendors could be banned from Indian 5G trials and auctions after the DOT recommendation.

Although the reason given by the DOT is the data privacy issues for which Huawei and ZTE have also been accused by most countries including the US, UK Australia. The recent ban comes from the UK which banned Huawei from the country. Now DOT is also citing similar reasons and wants to safeguard Indian data from falling into Chinese hands. The local policy of China makes all the Chinese companies compelled to share user data with the Chinese Government.

In the absence of Huawei and ZTE, Indian telcos would be left with Ericsson, Nokia, and Samsung. However, it would incur more deployment costs, up to 15%-20% as Huawei and ZTE had been offering the lowest costs for equipment and deployment.

Reports suggest that the government may consider lowering the base price of the 5G spectrum to compensate operators if they have to pay more for buying non-Chinese equipment. Reliance Jio has already developed its network from scratch for its 5G network, Airtel and Vodafone have strong tie-ups with Nokia and Ericsson, while BSNL is the state-owned telecom company.

It leaves a very narrow window for Huawei and ZTE to make a comeback until it clears all its allegation. Whereas, Indian Telecom companies will enjoy lower spectrum prices as compensation for developing their network or tie-up with more secure Nokia, Ericsson, etc.