Trai starts exercise for next spectrum auction across 9 bands

Among the nine are two new bands that can be used for deploying 5G services

The Telecom Regulatory Authority of India (Trai) has begun the exercise for conducting the next round of spectrum auction in nine bands, including two bands that can be used for deploying 5G services, as well unsold air waves from the previous sale.

The department of telecommunications (DoT) had in April sought recommendations from Trai for the reserve price and the quantum of air waves to be sold in 2017.

However, Trai said since 60 per cent of air waves remained unsold in last October’s auction and with concerns about the financial health of the telecom industry, it must be consulted on when to conduct the auction and whether all the air waves should be sold at one go or in phases.

The government is planning to auction spectrum in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz and 3400-3600 MHz bands in the next auction. It also plans to sell 60 per cent of the unsold air waves from the last auction and two new bands, 3300-3400 MHz and 3400-3600 MHz.

Trai is seeking comments from telecom operators on the 2017 auctions. The last date for sending comments is September 25 and counter-comments are expected latest by October 3.

Trai said the telecom industry was undergoing consolidation as some operators had filed for merger of their licences and others had traded their spectrum and shut services.

“The DoT in one of its communications has indicated that about Rs 3.08 lakh crore is due over the next 11 years on account of deferred payment plans opted by telecom service providers for the purchase of spectrum rights in the recent auctions,” Trai said in the consultation paper.It added that the telecom industry owed Rs 4.60 lakh crore to various financial institutions and banks.

In the previous auction, the government had put air waves worth Rs 5.66 lakh crore on sale. However, it was able to sell only Rs 65,789 crore of spectrum. About 60 per cent of the spectrum remained unsold and there were no takers for the coveted 700 MHz band, which alone could have raked in Rs 4 lakh crore if sold entirely.

The telecom industry, however, wants the auction to be postponed to the latter part of 2018 or early 2019.

“We feel that the Government of India should not rush to auction spectrum this year and instead, allow the market to settle down in the wake of recent mergers and acquisitions. Thus the timing of the auction of any band should be not before the latter part of 2018 or better still early part of 2019 once all the consolidation has been announced and locked down,” COAI DG Rajan S Mathews said.

He further said by that time companies would be in a better position to ascertain and look at any additional spectrum needs after they put their networks together.

Regarding 5G, the industry body said 5G spectrum should be auctioned only after the ecosystem is developed, especially for services and apps that can work on all bands but would work much better and faster on 5G spectrum.

“Thus 2019 might be an appropriate time to auction 5G spectrum as there will be better use cases and applications for 5G, for which at least a year, or year and a half down the line is required,” Mathews said.

On 700 MHz spectrum band, COAI said no bids were received in the October 2016 auctions, it is recommended that Trai needs to revisit the reserve price of 700 MHz band and price it much lower as per the prevailing market ecosystem.