India 5G spectrum: The auction process of the U.S. has been completed, where 71 percent of the airwaves were bid for Rs 1.5 trillion. But all telecom operators will have to increase their tariff by 4 percent to pay this amount.
Jio, Airtel, Vi will have to increase the rates of 4G plans
Nomura Research said that with the huge SUC savings, telecom operators would have to do one of two things to bear the annual spectrum cost. Under the first option, telecom operators will have to increase the incremental tariff by 4 percent on the total customers.
Under the second option, companies will have to charge 30 percent more premium on 5G plans than the popular 4G plan offering 84 days validity and 1.5GB daily data.
Jio will have to make the most of its plan due to higher bidding than Nomura Research. After SUC savings, Jio’s spectrum expenditure will be Rs 5,290 crore, which is much higher than Bharti Airtel spending Rs 1,430 crore and Vi spending Rs 720 crore.
According to the report, Bharti Airtel and Vodafone Idea will have to increase the prices of their recharge plans by 2 percent, while Reliance Jio will have to increase the plan by 7 percent to bear the cost.
As we mentioned earlier, Jio was the highest bidder in the 5G spectrum auction. Due to this, its total expenditure has become 88,078 crores. Bharti Airtel spent Rs 43,084 crore in the auction and Rs 18,799 crore was spent on Vodafone Idea’s share.
The government has said that the spectrum purchased in this auction and purchased in future will not attract any spectrum charges. So, if a telecom company buys 5G airwaves in large quantities with zero SUC, its total payout will drop sharply.