NEW DELHI: 5G spectrum sale will be held in March-April 2020, but the government has decided to not reduce the prices of the airwaves even though the telecom industry passes through a massive financial crisis and has been seeking lower asking rates for the auctions.
Digital Communications Commission, the apex decision-making body of the telecom department, on Friday approved the impending spectrum sale — entailing a total of 8,300 MHz across 22 circles — that at reserve prices will fetch the exchequer Rs 5.22 lakh crore.
“The DCC has today approved the recommendation of Telecom Regulatory Authority of India (
). We are hopeful that auction shall be conducted in March-April,” telecom secretary Anshu Prakash said.
The secretary said he expects demand for the spectrum to be healthy, even though most of the companies have expressed doubt on a healthy sale due to “high reserve prices” that have been fixed by Trai. “We are hopeful of healthy participation as demand for data is growing. Telecom operators need spectrum to further expand their network.”
Based on views sought by the government, Trai on August 1, 2018 had recommended auction of spectrum in the 700MHz, 800MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz, 3400-3600MHz bands.
Rajan S Mathews, director general of industry body COAI, however, maintained that he does not see active sale due to the stressed balance sheets of telecom operators such as
Idea. “The quantum of 5G spectrum is too less and price is too high. I don’t feel that stressed balance sheet of telecom operators will allow them to bid for this spectrum”
had informed Parliament that 275 MHz of radiowaves frequency between 3,300-3,400 MHz and 3,425-3,600 MHz band is available for
The COAI claimed that spectrum reserve prices in India are 4-6 times higher than that of similar spectrum sold recently across several countries. ” …telecom companies will find it very difficult to raise funds and participate in the auctions.”
Trai had initially given recommendation for radiowaves valued at Rs 4.9 lakh crore. However, the telecom department has also included additional spectrum for the auction which will be free from expiration of licences of Reliance Communications, Bharti Airtel in 8 circles and Vodafone and Idea Cellular in 4 circles each.
Successful bidders will have to pay 25% of the amount upfront for sub 1 GHz, and 50% upfront for higher frequency bands.
Installment will be spread over a period of 16 years. There will be a two-year moratorium for payment after the upfront amount is given. This means that installment will have to be paid from third year, in 16 annual installments.
Successful bidders will be required to make only 10% upfront payment for sub-1 GHz band and 20% 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% only for spectrum that will be available within a month from the auction,” Prakash said.