New Delhi: The government has asked the telecom regulator to review the entire architecture for spectrum auction that it had suggested for 4G and 5G airwaves in August last year to ensure that there is enough competition given extreme consolidation in the industry and that 5G rollout benefits the social sectors of the country, and the entire spectrum is auctioned unlike in the past, a senior Department of Telecommunications (DoT) official said requesting anonymity.
The Digital Communications Commission on Thursday met to review the regulator’s August recommendations as the country gears up for its first 5G auction this calendar year.
“Given that the government wants spectrum auction to happen this calendar year, TRAI’s views have been sought within one month after which the Digital Communications Commission will reconvene to look at the revised suggestions," the official said.
The government’s decision to seek revised architecture for an auction comes at a time when the industry has been complaining of high spectrum prices adding to the burden of a low tariff environment.
Bharti Airtel has said 5G prices are exorbitant, while Vodafone Idea suggested the 5G auction should happen in 2020.
The telecom regulator had in August recommended a sharp cut in the base price for 4G airwaves and auctioning all the available spectrum, in a relief for the telecom industry caught in a bruising tariff war.
The Telecom Regulatory Authority of India (Trai) proposed fixing the base price for the 700MHz band at ₹6,568 crore per MHz — 43% less than ₹11,485 crore set in the 2016-17 auction.
Similarly, for airwaves in the 800MHz and 900MHz band, Trai suggested lowering prices by 21% and 51%, respectively. For airwaves in 3,300-3,600MHz, it suggested a floor price of ₹492 crore per MHz.
The high-value 700MHz spectrum is considered very efficient for deploying 4G LTE networks and has greater structural penetration.
Trai said the 3,300-3,600 MHz band, most likely to emerge as the primary band for the rollout of 5G services, should be auctioned as a single band and in the block size of 20MHz each at ₹492 crore per MHz. In South Korea, the same band was priced at roughly ₹131 crore per MHz in auctions held in June.
The government has not auctioned any spectrum in financial years 2017-18 and 2018-19.
The telecom sector is reeling under a mountain of debt, and a sharp fall in revenue following the sustained disruption by Reliance Jio, and its rock-bottom data pricing strategy.
Jio’s entry in September 2016 triggered a consolidation in the industry, forcing smaller companies to either shut shop or be acquired by bigger entities. Just two private operators, Bharti Airtel and Vodafone-Idea combine, are left to fight it out with Jio.
The government is currently in the process of finalising a road map for the rollout of 5G services, the next-generation technology for wireless communications, which is expected to improve data speed and propel Internet of Things.
Trai suggested in August that bidders should not be allowed to hold more than 100MHz of the 3,300-3,600MHz band to avoid monopolization by an operator. The government should also not set any rollout obligations on operators in this band, it had then said.
