Telcos to Not Get Spectrum for 30 Years, 20 Years will be the Norm

The Telecom Regulatory Authority of India (TRAI), in its recommendations to the telecom department, said that the pricing of the spectrum for 30 years should be 1.5x of the price for the 20 years.

Highlights

  • The Indian telecom operators are not going to get the spectrum for 30 years.
  • Currently, the telcos get the spectrum from the government via an auction route for 20 years.
  • Jio contested this recommendation from TRAI, suggesting that it would negate the implementation of the relief measures announced by the cabinet. 

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telcos to not get spectrum for 30

The Indian telecom operators are not going to get the spectrum for 30 years. The Department of Telecommunications (DoT) announced relief measures for the telecom industry back in September 2021, and one of the measures was to increase the duration for which the telcos can bid the spectrum. Currently, the telcos get the spectrum from the government via an auction route for 20 years. However, the government was planning to increase it to 30 years.




The Telecom Regulatory Authority of India (TRAI), in its recommendations to the telecom department, said that the pricing of the spectrum for 30 years should be 1.5x of the price for the 20 years. However, Jio contested this recommendation from TRAI, suggesting that it would negate the implementation of the relief measures announced by the cabinet.

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The government has not gone with the 30-year route, because it would lower the revenues for the center and it can't justify offering the airwaves at 1.5x pricing. It would have meant the same thing for the telcos if they had to pay a higher price. The telcos would rather prefer going for the 20-year license for the airwaves in such a scenario.

Further, the telcos also wouldn't want to get the airwaves for more than 20 years as the technology is evolving quite rapidly and what airwaves will be useful and what will not will keep changing fast. Thus, a 20-year period is in the best interest of everyone here.

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COAI (Cellular Operators Association of India), an industry body that represents the Indian telecom operators, has asked the government to lower the reserve price of the airwaves. Citing the example of neighbouring nations and their tariffs, COAI said that the current reserve price of the airwaves is too high in India and it has had a major impact on the earnings potential of the telcos.

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