Union Budget 2022: Govt targets spectrum auction, 5G roll out in FY23

India is likely to see the rollout of 5G telecom services by private players within the financial year 2022-23. The Union Budget further announced that 2022 will also see spectrum auctions to enable the 5G push by telecom players.

The Union Budget noted that the rollout of 5G technology would enable growth and would give rise to new job opportunities.

The Budget also continued its focus on Production Linked Incentive (PLI) schemes. To further the 5G rollout, Finance Minister Nirmala Sitharaman announced a design-led manufacturing PLI scheme for Telecom equipment essential for 5G.

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The Budget Speech also revealed the government’s plans to connect rural and remote areas. The government announced that 5% of annual collection under the universal service obligation fund (USOF) will be deployed to enable broadband in rural and remote areas.

The Budget also declared that contracts for laying optical fibre in all villages will be awarded under the Bharat Net program, through the PPP model in FY23.

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Responding to these announcements Lt. Gen. Dr SP Kochhar, DG COAI said, "We are glad to see the focus on the enhancement of digital connectivity and the announcement for the required spectrum auction in 2022 for the rollout of 5G mobile services. The proposal for taking progressive decisions in encouraging affordable broadband and mobile services through facilitating PLI scheme for 5G equipment, laying optical fiber cables through PPP model under BharatNet project are welcome steps."

However, he further added that there was disappointment that various long-standing demands of the sector were not met. Telcos had made multiple appeals before the government to abolish USOF, Rationalization of License Fee and spectrum usage charge (SUC) and exemption from levy of Basic Customs Duty on telecom equipment.