Govt to auction 8300 MHz spectrum at reserve price of ?5,22,850 crore

spectrum

NEW DELHI : The department of telecommunications plans to auction 8300 MHz spectrum at a reserve price of ?5,22,850 crore in March-April, Telecom Secretary Anshu Prakash said on Friday. “We have accepted the telecom regulator’s recommendations on spectrum auctions including the prices suggested by them,” he told reporters.

Even though Telecom Minister Ravi Shankar Prasad, at the India Mobile Congress in October, had said the government would undertake “reform in spectrum pricing,” the telecom panel has stuck to prices suggested by TRAI.

Out of the 8300 MHZ of airwaves, 6050 MHZ are allocated for 5G services.

This development is expected to come as a setback to telecom companies such as Airtel and Vodafone Idea which have deemed these prices too expensive.

The Digital Communications Commission (DCC), the highest decision making authority in the department of telecommunications, on Friday met to deliberate the regulator’s suggestions for spectrum auctions.

The government had earlier this year already floated an RFP (request for proposal) to appoint an auctioneer for the process. Last spectrum auctions took place in 2016, managing to sell only a fraction of the spectrum on offer.

“The bids for RFP to appoint an auctioneer will be opened on 13 January,” Prakash said.

India’s telecom sector has witnessed disruption after the entry of Jio, a subsidiary of Reliance Industries Ltd, in September 2016, led to an intense tariff war, bringing down data prices to rock bottom and making voice calls free. Following which, many had to shut shop or were acquired by bigger players. The domestic telecom market is now largely a three-way play between Bharti Airtel, Vodafone Idea, and Jio.

The rollout of 5G next generation wireless technology is set to catapult data speeds and propel Internet of Things, yielding industry altering changes for agriculture, manufacturing, healthcare and education.

In August last year, the Telecom Regulatory Authority of India (Trai) had said the 3,300-3,600 MHz band, expected to be the primary band for 5G services, should be auctioned as a single band and in blocks of 20MHz each at ?492 crore per megahertz. While Bharti Airtel Ltd had said these prices are exorbitant and it would not participate in an auction at these prices, Vodafone Idea Ltd suggested the 5G auction take place in 2020. In South Korea, the same band was priced at roughly ?131 crore per megahertz in auctions held in June last year.

Given that the 700MHz band remained unsold in the last auction in 2016, Trai had in its recommendations in August last year already proposed fixing the base price for the 700MHz band at ?6,568 crore per megahertz—43% below the ?11,485 crore set in the 2016-17 auction. The high-value 700MHz spectrum is considered efficient for deploying 4G LTE networks and has greater structural penetration.

For airwaves in the 800MHz and 900MHz band, Trai suggested lowering prices by 21% and 51%, respectively.

News Source: livemint

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