Wiser from past auction, Trai suggests lower prices for key spectrum brands

NEW DELHI: In a bid to avoid a repeat of the woeful bidding seen at the last spectrum auction in 2016, the Telecom Regulatory Authority of India has recommended major cuts in base prices for the next round. The 2016 auction fetched the government just Rs 65,789 crore from the Rs 5.63 lakh crore worth of spectrum up for sale.

Large portions were unsold due to high prices. Trai’s recommendations place the base price for 5G spectrum going to auction for the first time at `492 crore per mega hertz (MHz), less than a third of what was stipulated for 2G spectrum in 2012, on a pan-India basis. 

For spectrum that went unsold during the 2016 auction, Trai has suggested that base prices be slashed by 43 per cent to `6,568 crore per MHz for the premium 700 MHz band, which had failed to attract a single bidder in 2016. The regulator has also recommended that the entire 5G spectrum be auctioned off at once and in block sizes of 20 MHz; telecom operators bidding for 5G services must shell out a minimum of Rs 9,840 crore on a pan-India basis.

To prevent monopolisation of the band, Trai has recommended a cap of 100 MHz of spectrum per operator. No rollout obligations are to placed on operators, and the lock-in period for spectrum to become eligible for trading is to set at five years instead of two years now.Setting up a mechanism for the audit of spectrum previously allocated to private and public sector operators has also been recommended. 

Meanwhile, telecom industry lobby COAI called for lowering of spectrum usage charges, licence fees and other levies, too.