The Telecom Regulatory Authority of India (TRAI) recently came out with recommendations for the 5G spectrum auction. While some of the recommendations were good such as the easy payment terms, some didn’t go down well with the telco body, Cellular Operators Association of India (COAI).
COAI believes the price cut recommended by TRAI is not sufficient, and the reserve price is still higher than what it should be. Through extensive global research, the industry had presented to TRAI in the consultation paper that a cut of 90% on the reserve price should be implemented. However, in the words of COAI, “to see only about 35-40% reduction recommended at prices, therefore is deeply disappointing.”
The 20 and 30 Year Game is Not Done!
COAI said that the government had decided to allocate the spectrum to the telcos for 30 years. However, TRAI implemented the price cut on the spectrum for 20 years and then put a 1.5 times multiple on the price if the telcos are going for airwaves for 30 years.
According to Lt. General Dr SP Kochhar, Director General, COAI, “If one were to look at the pan-India price of 3.5 GHz spectrum, then we are back to square one with effectively no change and will nullify the relief provided by union cabinet in the year 2021.”
COAI has called TRAI to revisit the spectrum pricing recommendations it has released and do away with the minimum rollout obligations as it is a “retrograde” step. Further, the telco body asked the regulator to disallow the private enterprise networks for the “financial viability and orderly growth of the telecom industry”.
It is highly unlikely that TRAI would go back to the drawing board now and make the changes, but it has been a disappointing set of recommendations for the telecom industry body. Even the analysts believe that the price cut recommended by TRAI was lower than what was expected.