Airtel and Vodafone Idea May Get Relief as DoT Plans to Cut Down Spectrum Prices by Half

The telecom industry in India remains buried under a massive debt which now surpasses Rs 8 lakh crore. The concerns in the industry about the financial health of the sector have been rising day by day, and the companies are not the only ones concerned now. The financial situation of the industry is in such a situation that even the government had to do some intervention in this regard. The telecom operators are also looking for some support from the government in the form of relief so that the industry remains viable. The trio which leads the industry including the leader, Reliance Jio, and the incumbents Vodafone Idea and Bharti Airtel have massive dues, especially the latter two. However, one of the major burdens that might make the situation even worse for these telecom operators is the fact that they might have to pay a hefty amount for the 4G and 5G airwaves in the upcoming spectrum auction. There has been a lot of demand from the telecom companies to lower the reserve prices of the spectrum, but until now, there was no progress on that front. But, now it seems that there could be a ray of hope for the telecom companies.

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Trai Recommended Pricing Too Expensive for Telcos

Now, to recall, when the government initiated talks about the spectrum sale in late 2019 or early 2020, it approached the Telecom Regulatory Authority of India (Trai) for getting recommendations on the reserve price of the spectrum. When DoT (Department of Telecommunications) asked Trai to give recommendations on the pricing, Trai pegged the cost at Rs 492 crore per MHz. However, with this expensive pricing, the telecom operators were not pleased. The telcos felt that the price was too high for them to bid and would place them under extreme financial pressure and the Department of Telecom was with on the telcos on this stance. As such, DoT asked Trai to reconsider the spectrum pricing, which was unfortunately dismissed by the regulator. Later on, as per a report, the DCC was to consider the new pricing of the spectrum and then approve it.