Spectrum auction likely in March-April, no cut in 5G pricing
By MYBRANDBOOK
The Digital Communications Commission (DCC) on Friday gave its green signal for the ₹5.22-lakh-crore spectrum auction plan involving 8300 MHz of airwaves across 22 circles. The spectrum sale is likely to take place in March-April.
The decision however marks no change in the pricing of the spectrum finalised by the Telecom Regulatory Authority of India (TRAI).
Anshu Prakash, Secretary, Department of Telecommunications told reporters post the DCC meeting that the bids for the spectrum will be opened on January 13.
Of the total spectrum available, 6,050 MHz will be available for 5G. The government has kept aside 225MHz of 4G spectrum for BSNL and the Railways, Prakash said.
“We are also auctioning spectrum which are going to be vacated because, since the auction was held in 2016, networks have expanded...more bandwidth is required...density of telephone is increasing/ usage/data is increasing and some licences are also expiring. So, it was decided that all spectrum be put to auction,” he said.
The additional spectrum made available following the expiry of licence, will come from Reliance Communications and Bharti Airtel in eight circles and Vodafone and Idea Cellular in four circles each.
In the upcoming auctions, DCC is making the upfront payment for the immediate available spectrum simpler. Successful bidders will be required to make only 10 per cent upfront payment for sub-1 GHz band and 20 per cent for above 1 GHz band for the set of spectrum that will not be available after 6 or 12 months and balance before 1 month of their availability.
“Telecom operators will have to make upfront payment of 25 and 50 per cent only for spectrum that will be available within a month from the auction,” Prakash reiterated.
Given their financial condition, operators including Bharti Airtel and Vodafone-Idea had opposed the auctions. In particular, operators found the pricing of the 700 MHz, which is fixed at ₹6,568 crore, too high though it had been brought down from the ₹11,485 crore set in the 2016 auction (it remained unsold then).
Reacting to the announcement, the Cellular Operators Association of India (COAI) said the DCC’s decision to proceed with spectrum auctions in the near future is fraught with challenges.
“With spectrum reserve prices four to six times higher than that of similar spectrum sold recently in several countries, and with high levels of debt and prevailing financial stress in the sector, telecom service providers will find it very difficult to raise funds to participate in the auctions,” Rajan S Mathews, Director General, COAI, said.
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