Airtel Might Not Bid For 5G Spectrum Due To High Price: Report

The telecom ministry has already approved the auction of the 5G spectrum in India. Now, a new report suggests that major telecom operator Airtel might not make a bid for it, as the base price is too high.

Airtel intimated that it is already under a lot of stress due to debt of Rs. 1.14 lakh crore and the amount they have to pay for adjusted gross revenue (AGR) dues to the government. However, the company's financial officer said that the situation is improving after the hike of rates, which is likely to increase further in a couple of months.

"On the 3.5 GHz band, Trai has recommended price to Rs 50,000 crore for 100 mhz of the spectrum. 5G requires a large block of spectrum. 100 Mhz spectrum for 50,000 crore, we can't afford. We believe it is too high. We will not pick it up at those prices," Bharti Airtel MD and CEO for India and South Asia Gopal Vittal were quoted by PTI.

Notably, TRAI has fixed Rs. 492 crore for per Mhz for 5G spectrum, which is very high as per industry sources if you compare with other countries. In fact, TRAI has also intimated that operators have to buy 20 MHz, which means they have to spend Rs. 9,840 crore.

"While our ARPU will go up in the next quarter because of tariff increases, they are just not good enough. At Rs 200, we will barely be head above water in terms of return on capital. It is clearly something that we need to see moving. I cannot comment on what the timing is," Vittal said.

Meanwhile, Airtel has managed to attract new customers from October- December 2019. The company added 12.38 crore, 4G users, during this period. However, the company has lost Rs. 1,305 crore in Q3 2019.