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Trai Refuses to Budge on Spectrum Price Recommendations, Puts Responsibility of Auction Success on DoT

In a new turn of events related to the auction of the 4G and 5G airwaves which is to happen later this year, the Telecom Regulatory Authority of India (Trai) has refused to budge on the recommended prices for the spectrum. The telecom regulator has also said to the department of telecommunications (DoT) that no one can guarantee the sale of all the airwaves which are put up for auction, as per an ET Telecom report. To recall, in the last auction for spectrum the DoT did not see any buyers for some of the spectrum owing to high prices, and this time around DoT asked the telecom regulator consider reducing the reserve price of spectrum looking at the financial health of the industry.

Telcos Disappointed With No Change in Spectrum Prices

In its remark to DoT, the telecom regulator has also said that it is the collective responsibility of the DoT and the marketing efforts of the department as well, which will make the spectrum auction a success. The department had asked the sector regulator to once retake a look at the overall auction structure besides urging it to change and lower the reserve prices of the spectrum for the upcoming auction. DoT was urging the regulator to make changes such that it would allow the department to avail maximum spectrum for sale for government revenue.

The industry watchdog, in its response to DoT, said on Monday, “The authority reiterates the spectrum valuation and reserve prices as contained in its recommendations dated August 1, 2018.” The regulator also added that it had already taken a look at the necessary development before making recommendations for the prices back in August 2018. It further added to its statement, “The Government’s own marketing efforts will also have an impact on participation in auction. Therefore, no guarantee can be given about sale of all the spectrum put to auction, as it depends on various factors”.

Trai Also to Not Reconsider Auction Architecture

The regulator also added that the pan-India auction of a spectrum is something that is infeasible, and on these grounds, it refused to relook at the architecture of the spectrum which is to be auctioned later this year. It also said that the issues pertaining to the type of auction, payment conditions and other related terms were already settled with the finance ministry or the RBI.

The director general of COAI (Cellular Operators Association of India) also added on this issue, “The DCC (Digital Communications Commission) and the inter-ministerial cabinet group have the option of reviewing and reducing the reserved prices as they did before.”

Two Demands of DoT That Trai Approved

However, there are some views of DoT which Trai has agreed to, and it has said that the lock-in period for spectrum trading can be brought down from 5 years to 2 years to promote more extensive participation in bidding of 5G spectrum along and sooner deployment of 5G in India. Also, the telecom operators will be able to bid for a minimum of 0.2 Mhz, instead of 0.6 Mhz, in the 900 MHz and 1800 MHz bands.

The views that Trai has rejected include that the 5G bands – 3300 to 3600 Mhz – should be lower than 100 Mhz. As per Trai, this has been done to keep a single bidder from monopolising the spectrum, while still complying with the 35% cap. Moving forward, the regulator’s responses will be taken up by the Digital Communications Commission (DCC), which will give its final opinions on the matter.

Arpit Sharma

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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Arpit Sharma