TRAI floats auction plan for nine bands, seeks stakeholders’ views

The Telecom Regulatory Authority of India (TRAI) consultation paper on the next round of spectrum auctions has raised questions on the timing of the sale, given the fact that the industry is going through consolidation and also owes about ₹4.60 lakh crore to various financial institutions.

In the consultation paper released on Monday seeking stakeholders’ response, the regulator has noted other issues faced by the industry, including one relating to spectrum holdings when two telecom companies merge.

It has rolled out the auction plan for nine bands, including 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz and 3400-3600 MHz bands.

Talking about timing of the auction, TRAI has asked “if the spectrum auction is held now, should the entire spectrum be put to auction or should it be done in phased manner — auction for some of the bands be held now and for other bands later based on development of ecosystem etc?”

The last auction was held in October 2016, wherein about 60 per cent of total spectrum remained unsold. In the present reference dated April 19, the Department of Telecom had proposed to auction spectrum in these bands again. In addition, DoT has included 275 MHz of two new bands meant for 5G services — 3300-3400 MHz and 3400-3600 MHz.

The paper has also sought views on the quantum of spectrum to be auctioned, optimal block size, duplexing scheme, spectrum cap, rollout conditions and methods to be used for valuation and estimation of reserve price of spectrum.

TRAI has also asked the stakeholders whether the block sizes and minimum quantity for bidding in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands should be kept the same as in the last auction and if not, what should be the band-wise block sizes.

During the last auction, the government had put airwaves worth ₹5.66 lakh crore on sale. The auction that lasted five days had seven telcos making a commitments of ₹65,789 crore for buying 964.80 MHz of spectrum in various frequency bands. There were no takers for spectrum worth ₹4 lakh crore in the 700 MHz band.

Meanwhile, TRAI has kept September 25 as the last date for comments on this paper and counter-comments as October 3.

Considering industry conditions, the Cellular Operators Association of India said the auction should happen towards the end of 2018 or early 2019, and there should be a proper evaluation of the prices of the 700MHz band.

“A full-fledged bottom-up evaluation process, which analyses market conditions, revenue opportunities, market demand and supply, should be undertaken afresh, and the pricing must be rationalised in accordance,” Rajan S Mathews, Director General, COAI, said.

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