Next Spectrum Auction Likely in the Second Half of 2019: Telecom Secretary

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Next Spectrum Auction Likely in the Second Half of 2019: Telecom Secretary

The Department of Telecommunications will only be holding a spectrum sale in the latter half of the next fiscal year, outlined an ET Telecom report. As per a top government official, the speculations of an auction being held before the end of this fiscal year in March are to be dismissed. The announcement comes directly from Telecom Secretary Aruna Sundararajan, who has said, “The Telecom Regulatory Authority of India (Trai) has given preliminary recommendations. However, the (5G) task force has given a broader set of spectrum bands. The Department of Telecom (DoT) is concurrently working on both.” She said on Monday that the telecom department would be in the condition to hold an auction in late 2019.

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Bharti Airtel and Vodafone Idea Demand for Delayed Auctions

It is also worth noting that the DoT has not yet charted the schedule for the upcoming auction. Previously during the conversations with the DoT officials, they had remarked that a sale in the FY19 was rather unlikely since the industry remains burdened under huge debt and most of the companies remain cash-strained. The issues of revenues and profitability are one of the major ones in question right now. However, back in August the sector regulator, Trai had recommended the auction of 4G and 5G airwaves. Later to promote the sale of the airwaves, the regulator had cut down the price of the premium 700 MHz band by 43%, bringing it down to Rs 6,568 crore a unit and set Rs 492 crore per unit as the minimum rate for 5G.

It is also worth noting that there has been a clash of interests between the operators regarding the auction of the airwaves. While Reliance Jio wants the sale to happen at the latest and agrees the prices suggested by the Trai, the newly merged Vodafone Idea does not wish for any auction before the year 2020, on the other hand, Sunil Bharti Mittal led telco Bharti Airtel has taken middle ground and wants the 4G auction to happen at latest, with the 5G auction to be postponed for 2020.

In another related development, the telecom secretary has sought support from states in deploying telecom infrastructure at a massive rate so that the network can be increased by as much as three times by the year 2020.

Sundararajan said, “We aim to increase from 18 lakh to 50 lakh base transceiver stations, and from 14 lakh kilometres of optic fibre cable to 55 lakh kilometres by 2022.” In a one of its kind workshop which saw participation from state governments, she highlighted that the ongoing BharatNet program aims to connect 2.5 lakh gram panchayats or village blocks and that it would not be possible without enough support from the states. With enough support, the government aims to achieve the target of $100 billion of investment along with the creation of four million new jobs. Not only this, but the project looks forward to $120 billion of additional revenue annually with the contribution of $670 billion to GDP. To put things into perspective, currently, only 10% of jobs are created with $20 billion of investment. In turn, this contributes to $30 billion to the government in revenue and $ 170 billion in contribution to the country’s GDP.

BharatNet to Achieve Big Goals by 2022

The secy also urged the states to rationalise Right-of-Way (RoW) charges. Adding to her words, that to empower the BharatNet ambition, the centre would take help from private telecom operator and also public telecom companies. The centre is also going to sign MoUs with state governments to ensure custodianship of telecom infrastructure as well, the secretary remarked.

Sundararajan’s statement read, “We are telling states if they need dark fibre, they can be incentivised which will create a demand-based pull.” When asked about the deadline of the BharatNet project she said, “Our effort is to do as much as possible by March 2019. Wi-Fi should be available in the next six months.”

Another fact which was revealed during the workshop was the department statistics, which highlighted that a lot of bandwidth had not been utilised by the states, although it is being provided for free to institutions like schools, healthcare centres, police stations and post offices. The project aims to empower 12.5 lakh such institutes with high-speed Internet access by April next year.

She added that BharatNet is the most extensive program and the government has diverted substantial funding for the project. However, if the states do not want it, then the people are going to be devoid of the services. She also added that the government aims to provide the services to every household in India by the year 2022. The secy said, “It will be India’s imperative to achieve Broadband for All, and India is uniquely placed to reap digital dividends.”

Telecom minister, Manoj Sinha also added his thoughts. He said, “With accelerated efforts over the last two years, we have reached the halfway mark to connect 2.5 lakh gram panchayats.” He further added, “Rs 20,000 crore worth mobile connectivity projects are underway in Northeast and Left-Wing Extremism (LWE) affected regions.”

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