Global rating agency Moody’s Investors Service in its latest report has stated that the planned spectrum auctions in India, which includes radiowaves for 5G technology, are likely to be held only in the second half of 2020 (H2 2020) or later, given the stressed balance sheets of telecom operators. It also said that regulators in countries like India, Indonesia, and Bangladesh are still initiating consultations with operators and are likely to schedule 5G spectrum auctions only in H2 2020 or later.
The report has stated that Indian government has identified the 5G spectrum in the 3.3-3.6 GHz bands. However, it said that sale of spectrum in 2019 is unlikely, especially given the telcos' request to the government to restructure their existing spectrum debt in light of their stretched balance sheets. It noted that all telecom operators, barring Reliance Jio, have been under pressure due to huge debt and decline in margins. It pointed out that even though there are signs of market recovery this year, severe price competition in India and Indonesia is leading to an acceleration in capex plans for companies.
Although 5G spectrum allocation timelines are still being discussed in these countries, Moody’s expects all companies to participate in these spectrum auctions. It highlighted that most of the countries in Asia-Pacific region are offering spectrum at low prices to help companies leapfrog into 5G services, and to incentivise operators. It added that India seems to be an exception given spectrum pricing is still quite contentious.