4G and 5G Spectrum Auction Might Happen in First Quarter of 2020, Telcos Still Reluctant

The Government might hold the 4G and 5G spectrum auctions in April-June 2020 next year

Highlights
  • The telecom operators are still reluctant to participate given the high costs
  • Government has said that it will not lower reserve prices
  • The telcos might need to buy back the spectrum in 2021

The next big thing in the telecom industry when it comes to the growth aspects happens to be the 4G and 5G spectrum auction in the country. There have been a lot of clouds surrounding the matter of spectrum auctions in the country because of the costs involved in the sale of this spectrum. Most telecom operators have said that the spectrum costs remain unbearable and unsustainable. However, there is a new update from the government on the matter. As per a new ET Telecom report, the crucial spectrum auctions in the country which will witness the sale of 4G and 5G spectrum can be held in the April-June period next year, as per the people aware of the matter. As per these sources, the final timelines have not been frozen yet, and this is a tentative schedule for the upcoming auctions.

4g-5g-spectrum-auction-2020

Telcos Consider Reserve Prices as Too High

As per the government’s opinion, the help of moratorium of two years which has been given to the telecom operators for paying the spectrum dues, combined with the tariff hike which has happened in the recently, will allow the telecom operators to participate in the spectrum auction for 4G and 5G airwaves. But, even with the new changes in the industry, the tariff hike and the slight relief from the government, the telcos maintain their stance that the reserve prices suggested by the Telecom Regulatory Authority of India (Trai) are too high, especially for the 5G airwaves. Based on this statement, the telecom operators want the auction deferred.

The telecom minister, Ravi Shankar Prasad has already spoken in the parliament about the spectrum auction saying that the government will not lower the reserve prices which have been suggested by the telecom regulator. He also added that the highest decision-making body in the telecom industry which is the Digital Communications Commission, is set to meet shortly regarding the issue of spectrum sale and it could discuss on various points, one of which would be the pricing of the spectrum. The government has also said that it won’t be cutting up the spectrum and selling it in pieces; instead, the centre would be selling the airwaves in large chunks.

Data Airwaves Expiring in 2021

As per a second person, the telecom operators require more bandwidth with increasing data demand and a lot of airwaves expiring in 2021. He added that it is up to the government to hold the auctions and then up to the telecom operators to participate. As per the stats available on the spectrum auction, around 8,293.95 MHz of 4G and 5G spectrum will be put up for sale which can get the government Rs 5.86 lakh crore if all of it is sold at the reserve price suggested by Trai.

Another person aware of the happenings said, “If operators can bid for spectrum of insolvent companies like Reliance Communications (RCom), it means they need spectrum to run their network and therefore can participate in auctions as well.”

If the analysts are to be believed, then Reliance Jio is in need of early auction of 4G airwaves since a sizeable chunk of Reliance Communications airwaves are in the 800 MHz band. These airwaves are used by Reliance Jio on a sharing basis, and they will expire in 18 circles in July-August 2021. Not only this, Bharti Airtel and Vodafone Idea will also need to buy back their expiring airwaves, but they are mostly in the 1800 MHz band only.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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