India to auction 5G airwaves in 2022 in boost to tech economy

People stand in front of a board depicting 5G network at the India Mobile Congress 2018 in New Delhi, India, October 26, 2018. REUTERS/Anushree Fadnavis

NEW DELHI, Feb 1 (Reuters) – 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.

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.

During a news briefing, 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.

“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 (ERICb.ST).

“Design-led initiatives for 5G… will strengthen the ‘Make in India’ initiative, and contribute to making India a global manufacturing hub.”

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 New Delhi into equity. read more

That 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 (BRTI.NS) and Vodafone Idea (VODA.NS).

Jio, the telecoms venture of conglomerate Reliance Industries (RELI.NS) which counts global tech giants Facebook (FB.O) and Google (GOOGL.O) 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 (AAPL.O) key suppliers Foxconn (2317.TW)and Wistron (3231.TW) to widen local operations and turned India into the world’s second-biggest smartphone maker.

Reporting by Sankalp Phartiyal; Editing by Kim Coghill and Bernadette Baum

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