Smartphone makers positive about 5G spectrum auction plan
Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2022 on Tuesday, announced that the required spectrum auctions for 5G telecom networks will be conducted in 2022. “Telecom in general and 5G technology in particular can enable growth and provide employment opportunities,” the minister said in her address. She also added that the spectrum auctions will enable the rollout of 5G services by private telecom companies in 2022-23 — in line with the aforementioned timeline under which the next-generation mobile connectivity was expected to be rolled out in the coming months.
Sitharaman’s announcement is being seen as a positive move by smartphone manufacturers.
“With the deployment of 5G technology by private telecom operators by 2022-2023, we see accelerating growth and a huge opportunity for demand for 5G devices,” said Sanmeet Singh Kochhar, Vice President, India and the Middle East and North Africa (MENA), Nokia brand licensee HMD Global.
He added that 5G would bring new economic opportunities and benefits to India.
A Xiaomi spokesperson also indicated that the rollout of 5G services in the country would make the country ready for the future.
“We are excited about the government’s commitment to roll out 5G by 2023, heralding a new year of connected devices,” the spokesperson said.
Venu Cheriyan, Chief Financial Officer, Sennheiser India, said the arrival of 5G networks in the country would not only be beneficial for smartphones but also for other sectors including media and entertainment.
“With the announcement of the 5G spectrum auctions to be held this year and the rapid adoption of 5G mobile services, we will undoubtedly see an increase in content consumption, which will in turn lead to potential growth in the audio accessories industry,” Cheriyan stressed.
He added that the low latency and higher bandwidths of the 5G environment would bring a new experience to wireless audio transmission of music.
Bharat FIH, an electronics manufacturing services (EMS) company owned by Foxconn, expects the announcement of the 5G spectrum auctions to boost demand for 5G phones in the country.
“The announcement will enable more consumers to participate in the next level of the digital economy,” said Josh Foulger, Managing Director, Bharat FIH.
However, Tarun Pathak, research director at research firm Counterpoint, did not believe that the rollout of 5G would bring about major changes to the smartphone market.
“We expect 5G smartphone sales to grow three times this year even without networks and brands still want to be aggressive on the same as 5G as a feature is the third preferred feature according to Counterpoint’s consumer lens,” said Pathak. “So I don’t think there will be much change with respect to OEM strategy. But at least we have clarity on auctions now.”
Besides announcing the launch of 5G spectrum auctions, Sitharaman revealed that the government would launch a design-led manufacturing scheme to build an ecosystem for 5G. It will be available as part of the Production Linked Incentive Scheme, she said.
The minister also said the government would complete the long-running BharatNet fibre optic project by 2025. The project aims to provide high-speed internet connectivity to villages and remote areas.
Peeyush Vaish, partner and Telecom Sector Leader at Deloitte India, noted that the planned steps would accelerate the rollout of 5G services across the country compared to previous generations of mobile networks.
“The rollout across the country will also be much faster than previous generations of rollouts considering that the Finance Minister in her speech also talked about fiber connectivity in all villages by 2025,” Vaish said.
Nitin Bansal, Managing Director for India and Head of Networks for Southeast Asia, Oceania and India at Ericsson, said the finance minister’s telecom-focused announcements would provide the “required impetus” to create reliable internet connectivity in the country.
Telecom companies are also positive about the plans outlined in the Budget 2022 speech. However, telecom industry body Cellular Operators Association of India (COAI) expressed some disappointment over the government’s delayed response to industry demands.
“We are committed to fulfilling the Digital India Vision of our honourable Prime Minister, but we are a little disappointed that our long-pending demands remain unaddressed,” said SP Kochhar, Director General, COAI. “We look forward to continued and constructive engagement with the government for reduction of levies on the telecom sector.”
Details on the price band and exact timelines of the spectrum auctions for 5G airwaves have yet to be revealed. Given the ongoing losses that are hitting telecom companies including Vi, it is also unclear whether all players have the efficiency to properly bid for the next-generation network technology.
