DoT May Ask Trai to Revise Spectrum Prices for Next Auction

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The DoT panel is said to have expressed view that the auction should not be conducted before late 2019, given the industry’s poor financial health

The Department of Telecommunications (DoT) panel, which was set up to consider Trai’s recommendations on spectrum pricing and timelines, is reportedly not in favour of conducting the next spectrum auction before late 2019.

The panel members are said to have expressed their view that the auction should not be conducted before late 2019, given the poor financial health of the industry.

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The DoT may also ask the Telecom Regulatory Authority of India (Trai) to revise the spectrum prices it proposed for the auction, as they feel the debt-ridden industry does not have the strength to pay for more spectrum yet. The industry is said to be grappling with the over Rs 7 lakh crore of debt.

The panel may also proposed a cut in the lock-in period before which 5G spectrum buyers cannot trade the airwaves.

The recommendations of this expert panel will be presented to the Telecom Commission, which is the highest decision-making body in the DoT. The commission then is likely to send a reference back to Trai for revisions.

In August this year, Trai had recommended the auction of airwaves across the 4G bands of 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2100 MHz, 2300 MHz and 2500 MHz, besides 5G spectrum in the 3300-3600 MHz bands. These will be offered to Vodafone Idea, Bharti Airtel and Reliance Jio Infocomm, the three non-state telecom operators.

Trai had lowered the starting prices for most bands, specially the base price of the premium 700 MHz band by 43%. It had set Rs 492 crore per unit as the minimum rate for the next-generation 5G spectrum.

However, the industry was still not ready to pay prices, given the pressures on revenue and profitability, and the debt.

The industry experts said the base price of ₹492 crore per unit of 3500 MHz 5G spectrum was much higher than the ₹65 crore per unit discovered at a recent 5G auction in Korea.

In the auction held last October, the government managed to sell only 964.80 MHz of spectrum in various frequency bands against 2,354.55 MHz airwaves put on the block. Even at the end of the five-day auction, nearly 60 per cent of the spectrum had remained unsold, including the expensive 700 MHz band, which found no buyers.

The  telecom sector had ignored premium radiowaves in 700 MHz band — put up for sale for the first time last year at a reserve or base price of Rs 11,485 crore per MHz.

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