India’s budget for fiscal 2022-23 gave a thrust to its technology sector, with the Finance Minister announcing a plan to auction 5G airwaves this year, and pushing for the design and wider local manufacturing of telecoms and electronics products.
Soon after FM Nirmala Sitharaman made the announcement on 5G in parliament during her Budget speech, Telecoms Minister Ashwani Vaishnaw told the media outside the House that regulator TRAI would submit its recommendation on 5G spectrum auction and related issues by March after which the process of the service rollout would be expedited.
The airwaves auction in India, the world’s second-biggest wireless market with over a billion subscribers, will kick off a rollout of next-generation 5G telecoms services by end-March 2023, Finance Minister Nirmala Sitharaman told parliament as she presented the country’s budget on Tuesday, according to news dispatches from Reuters and PTI.
Later during a news briefing, however, Sitharaman declined to speculate on how much revenue the 5G auction would raise.
Prime Minister Narendra Modi’s government will also offer incentives to encourage more design-led manufacturing to boost 5G in the country, Sitharaman said, adding that all of India’s villages are likely to be connected by optical fiber for faster broadband services by 2025.
Meanwhile, commenting on the Union Budget 2022-23, the telecoms Minister said that the “recommendations on 5G are expected by March” from regulator TRAI.
He said that the budget focuses on enhancing research and development of indigenous technology.
“The finance minister’s announcement around 5G spectrum auction, 100% fiberisation with public-private partnership model will provide an impetus to build ubiquitous and reliable Internet connectivity,” said Nitin Bansal, the India managing director at Swedish telecoms gear maker Ericsson.
“Design-led initiatives for 5G… will strengthen the ‘Make in India’ initiative, and contribute to making India a global manufacturing hub,” he added.
India bailed out its cash-strapped telecoms sector last year with a slew of measures, including a four-year moratorium on airwaves payments due to it and allowing mobile carriers to convert interest they owe to the federal government into equity — a measure that was used by VodafoneIdea that has government shareholding of about 38 percent.
That bailout has helped telecoms firms free up cash to invest in growth and expansion, potentially making a 5G airwaves auction this year a hot bidding contest between the country’s three main carriers, Reliance Jio, Bharti Airtel and Vodafone Idea.
Jio, the telecoms venture of conglomerate Reliance Industries, which counts global tech giants Facebook and Google among its backers, has previously said it will be the first carrier to launch 5G services in India.
On Tuesday, India also announced a plan to gradually raise import taxes on some components used in electronic products such as smartwatches and earphones to boost local assembly.
Modi’s government has used import tax barriers and production-linked incentives to boost electronics manufacturing in India. That move has helped companies, including Apple’s key suppliers Foxconn and Wistron to widen local operations and turned India into the world’s second-biggest smartphone maker.
“Encouraging affordable #broadband and #mobile services through facilitating PLI scheme for #5G equipment, laying OFC in rural areas through PPP model under #BharatNet project are welcome steps,” tweeted telcos’ industry lobbying body COAI’s Director-General, Lt. Gen (retd.) SP Kochhar, while commenting on the Budget.