DoT seeks TRAI's views on spectrum pricing, quantum ahead of 5G auction

Telecom Department has approached TRAI seeking its recommendations on pricing, quantum and other modalities pertaining to radiowaves in multiple bands as it prepares the groundwork for holding 5G spectrum auction in the coming months.

The last round of spectrum auction, held in March this year, had raked-in winning bids of over Rs 77,800 crore for 855.6 MHz of spectrum.

When contacted, TRAI Secretary V Raghunandan confirmed that TRAI has indeed received a reference from Department of Telecom (DoT) on 5G spectrum but declined to divulge exact contents of the communication.

The regulator is currently examining the reference made by DoT, he said.

 

The reference is with regard to multiple bands and Telecom Regulatory Authority of India (TRAI) will seek additional information, if needed.

"We will try our best to meet the expectations," Raghunandan said when asked about the possible timelines for concluding the entire consultation process, including holding open house discussions (a standard practice followed by the regulator), and finalising its views.

According to sources, DoT's reference seeks views of TRAI on base price, quantum and all other modalities for spectrum across multiple bands. These include bands such as 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands as also 3,300-3,600 MHz bands (that were not put up for auctions in the last round), and millimetre-wave band (that is 24.25-28.5 GHz).

Recommendations have been sought on reserve price, block size, band plan, and quantum of spectrum to be auctioned, the sources said adding that the reference was received early last week.

It is pertinent to mention that Telecom Minister Ashwini Vaishnaw recently said the 5G spectrum auctions will "most probably" be held in February 2022, and the government may even try for a January timeline.

On the industry's concerns over high spectrum prices, the minister had said, "TRAI is consulting... Let TRAI consultations end and let them give their final report. That is the right time, I should speak".

High spectrum prices have been a long-standing grouse for the telecom industry and the pain point has been flagged time and again by prominent players.

Earlier this month, Bharti Airtel Chairman Sunil Mittal had expressed hope that the regulator will look into the industry's demands for a reasonable reserve price for 5G spectrum, and had termed the next-generation 5G as a force multiplier.

"I truly hope that TRAI will look into the demands of a reasonable reserve price for 5G, because 5G should not be seen as something that the exchequer should lean on, but should be seen as a force multiplier, because it's going to open up new opportunities for the industry, for the economy...that the indirect monies that the government will get out of the 5G ecosystem will be significantly more than keeping the reserve price high for the spectrum," Mittal had said.

Industry body COAI too had in its representation to DoT last month on measures to improve the financial health of the sector mentioned that the government should adopt a reasonable reserve price.

Recently, the government approved a blockbuster relief package for the telecom sector that includes a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.

The measures, aimed at providing relief to companies such as Vodafone Idea that have to pay thousands of crores in unprovisioned past statutory dues, also include the scrapping of Spectrum Usage Charge (SUC) for airwaves acquired in future spectrum auctions.

The last round of spectrum auctions, conducted earlier this year, had garnered winning bids of over Rs 77,800 crore for 855.6 MHz of spectrum. Billionaire Mukesh Ambani's Reliance Jio spent the most in the auction, picking up 488.35 MHz spectrum in bands such as 800 MHz, 1800 MHz and 2300 MHz for over Rs 57,100 crore.

Bharti Airtel won the right to use spectrum, the total value of which is about Rs 18,700 crore. For Vodafone Idea, the value of spectrum bought in auctions was pegged at Rs 1,993.4 crore.

Bids were received for 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz bands, but there were no takers for spectrum in 700 MHz and 2500 MHz bands in the recent auctions.