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NEW DELHI: India will among the leading countries globally to offer 5G services, with the country aims to begin offering these services within FY2022-23. To achieve this, India will hold 5G auctions within the next financial year, said finance minister Nirmala Sitharaman on Tuesday, while announcing the Union Budget 2022.
"This is going to bring the next wave of data accessibility and enhance the quality of digital interactions. from a government income point of view, 5G auctions should bring in quite a coffer," said Ritesh Kumar, partner at IndusLaw. The proceeds from 5G auctions are expected to be one of the largest contributors to non-tax revenue for the government.
The onus will now be on the industry including Bharti Airtel, Reliance Jio and Vodafone Idea to push 5G deployments, even as it seeks for reduction in 5G reserve prices.
"To enable affordable broadband and mobile service proliferation in rural and remote areas, 5% of annual collections Universal Service Obligation Fund will be allocated," Sitharaman added.
Continued emphasis on the importance of mobile connectivity and broadband for economic development, especially in rural India, will boost the telecommunication and associated sectors, experts said.
Sitharaman also announced inclusion of the design led initiatives for 5G and other technologies in production linked incentive (PLI) scheme. "PLI scheme extension to 5G rollout and the commitment to roll out fibre in all villages by 2025 will give an additional thrust to investment in new technologies in the telecom sector," said Peeyush Vaish, telecom sector leader at Deloitte India.
Contracts for optic fibre in all villages, remote areas will be given under Bharat Net through a public-private partnership mode in FY23 which will be aimed for completion by FY25.
"While an announcement on implementing Bharatnet optical fibre cable contracts through PPP has been made, an expeditious approach is needed to avoid delays given that the PPP model has witnessed mixed experience in other infrastructure sectors," said Jaideep Ghosh, COO, Shardul Amarchand Mangaldas & Co.
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