Another round of spectrum auctions is near at hand. A protracted process of consolidation in the telecom sector has left the air waves dominated by three main players — Bharti Airtel, Reliance Jio, and Vodafone-Idea Ltd — and consequently, the soon-to-be-held spectrum auctions will be keenly watched.
On Wednesday, the Telecom Regulatory Authority of India (TRAI) made public its recommendations for the auctions, and suggested that the spectrum reserve prices for frequencies that remained unsold in the 2016 edition should be lowered.
For instance, the reserve price of the 700 MHz band has been kept at ₹6,568 crore per MHz: it was ₹11,485 crore in the October 2016 auction. The high price of the band had kept operators away, and the airwaves went unsold.
Spectrum bands such as 700 MHz, 3300 MHz and 3600 MHz are considered good for data services as well as for 5G, so one can expect aggressively bidding, which could push up the auction prices, say industry watchers.
If all the spectrum bands are auctioned at their respective reserve prices, the government stands to earn revenue of around ₹5.06-lakh crore.
Also, the base price of 700 MHz should be twice the reserve price of the 1800 MHz spectrum band. The base price of 1800 MHz is kept at ₹3,285 crore per MHz on a pan-India basis.
The regulator has also recommended reduction of price in telecom circles where spectrum remained unsold in the 2016 auction.
For the 5G spectrum like 3300-3600 MHz band, TRAI has suggested that the reserve price be 30 per cent of the reserve price of the 1800 MHz FDD band. It has suggested that spectrum in the 3300-3600 MHz band be put up for auction in the block size of 20 MHz.
“To avoid monopolisation of this band, there should be a limit of 100 MHz per bidder. Since TSPs are allowed to trade their partial or complete spectrum holding to another TSP, the limit of 100 MHz spectrum in 3300-3600 MHz band shall also apply for spectrum trading,” TRAI said.
The government is yet to finalise the timing of the auctions. TRAI has suggested it may not be prudent to delay the auction or hold back the spectrum.