Trai to invite stakeholder comments on spectrum auction in 15 days

This comes when the telecom industry is battling fierce competition and shrinking profits

Starting the process for the next round of spectrum auction, the Telecom Regulatory Authority of India (Trai) on Tuesday said stakeholders’ comments would be invited for sales of unsold airwaves within a fortnight. 

The regulator would also seek views on 5G-compliant 3,400-Mhz band, which could turn out to be a game-changer in the Indian telecom market. 

However, the industry, reeling under intense competitive pressure, doesn’t seem to be in a hurry for yet another round of spectrum auction. Industry representatives have already sent out feelers to the government and the regulator to find out if the auction can be deferred.

While telling reporters that a consultation paper inviting comments from stakeholders for airwave auction would be floated in the next 15 days, Trai Chairman R S Sharma said it could take around six months from the start of the process to derive the base price of spectrum. He was speaking to reporters on the sidelines of an industry event.

The Department of Telecommunications (DoT) had recently sought the opinion of Trai on auctioning the remaining 1,389 Mhz spectrum this financial year (FY18). 

Trai would also review the base price of the 700 Mhz spectrum that remained untouched during last year’s auction, as the telecom companies found it too expensive. The 700 Mhz band is considered premium due to its efficiency and reach.

Under competitive pricing, the base price of the 700 Mhz band should be 30-40% lower than last year’s pan India base price of R s 11, 485 crore per Mhz, analysts said. They are of the view that the ecosystem for the premium 700 Mhz band is not in place as yet. In fact, it is widely believed that consumption of data was on the rise as it was available cheap. In about a year or so, the actual picture on data usage would emerge, based on which the demand for the 3400 Mhz band would be decided, an analyst who did not want to be quoted said.

Currently, the spectrum that is available with the companies would expire in 2020-21. Therefore,  firms are not in a rush to acquire more airwave, a Mumbai-based analyst said.

The quantum of airwaves that may be offered for bidding this time is 1,389 Mhz, as only 40 per cent (or 965 Mhz) of the total 2,355 Mhz spectrum was sold in the previous round of auction. The expensive 700 Mhz and 900 Mhz bands failed to find takers during the five-day auction last year. The 700 Mhz band was expected to fetch Rs 4 lakh crore for the government. 

While a few circles, including 1,800 Mhz and 2,300 Mhz, garnered the maximum amount of bids, the industry had also shown interest in 2,100 Mhz (3G/4G), 2,500 Mhz (4G) and 800 Mhz (2G/4G) bands.

In the last auctions, government had kept airwaves worth R s 5.66 lakh crore for sale. Seven telecom companies made commitments of R s 65,789 crore for buying 964.80 Mhz of spectrum in various frequency bands. Bids were received for 964.80 Mhz of spectrum out of 2,354.55 Mhz across seven bands put on offer.