RS Sharma, the Chairman of Telecom Regulatory Authority of India (Trai) today stated the telecom regulator is planning to issue its recommendations on spectrum auction and pricing for multiple bands this week. “It will happen immediately…expected to come out this week,” Sharma told PTI. He, however, did not divulge the regulator’s views on the pricing of radio waves, particularly those in premium bands such as 700 MHz where high prices had kept away bidders during the 2016 auctions. Another official aware of the development stated that the much-awaited recommendations about the spectrum pricing including the 4G and 5G bands could be issued as early as tomorrow.
The government is planning to hold the largest-ever spectrum auction of 3,000 MHz spectrum in the next round of sale, and the regulator’s ensuing views will wrap up an almost year-long consultation over the issue.
In August 2017, following a reference from Telecom Department, Trai had issued a consultation paper on spectrum auction for bands like 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, and also other bands like 3300-3400 MHz and 3400-3600 MHz.
The industry, however, has been of the view that operators are not ready for the next round of spectrum auction at this point, given the deep financial stress and ongoing consolidation in the sector.
The industry has also been in favour of lowering of reserve prices to enable adequate participation and ensuring fair market discovery especially in the backdrop of the sector’s financial difficulties.
The sector is reeling under Rs 7.5 lakh crore cumulative debt, and hyper-competition has only made matters worse for the established operators.
Engaged in a brutal and prolonged tariff war with newcomer Reliance Jio, the older players have seen erosion in their revenues, and continue to incur losses on India mobility services.
In the previous auction held in 2016, the government had put a total of 2,354.55 MHz of mobile airwaves for sale in the bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz, cumulatively valued at around Rs 5.63 lakh crore at base price.
However, nearly 60% of the radio waves, including premium 4G bands, had remained unsold in that auction.
In the five-day auction, seven telcos had made a commitment of Rs 65,789 crore for buying only 964.80 MHz of spectrum across multiple frequency bands.