Industry reacts to TRAI’s recommendations on 5G spectrum, COAI says prices too high

After the Telecom Regulatory Authority of India (TRAI) on Monday recommended a 35 per cent cut in the reserve price for prime 5G spectrum, the Cellular Operators Association of India (COAI) on Tuesday said it was disappointed by TRAI’s recommendations. COAI called the recommendation “one step backwards than forward towards building a digitally connected India”.

TRAI had suggested an auction plan valued at over Rs 7.5 lakh crore across multiple bands for radiowaves allocated over 30 years and advised a 39 per cent reduction in the floor price for the sale of spectrum for mobile services, including the latest 5G offering.

COAI in its letter stated that the telecom industry had recommended a 90 per cent lower price, and to see only about 35-40 per cent reduction recommended in prices is “deeply disappointing”.

TRAI advised the government for selling airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and new slots of 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz. It has suggested a lower reserve price for all bands, compared to last recommended prices in 2018.

COAI further called TRAI’s recommendations as “defying logic” as the authority decided to recommend reserve prices for 20 years and applied 1.5 times multiple to the price if spectrum is to be taken for 30 years despite the government’s decision to allocate 5G spectrum for a period of 30 years.

“If one were to look at the pan-India price of 3.5 GHz spectrum, then we are back to square one with effectively no change and will nullify the relief provided by union cabinet in the year 2021. This defies logic and calls for lower spectrum prices by the industry and intelligentsia to keep spectrum prices lower to enable the industry in aggressive network rollouts that will require massive investment,” stated COAI.

Meanwhile, Broadband India Forum (BIF), a Delhi-based think-tank, in a statement has hailed TRAI’s recommendations as historic, calling it a flexible payment option for spectrum pay-outs for sustainable growth, infusing liquidity and encouraging investments into the sector.

“TRAI has recommended the reserve price to be 1.5 times the reserve price for 20 years for the respective band as increasing the validity of spectrum from 20 to 30 years confers substantial advantage to TSPs by giving a longer-term certainty for planning and recovering their investments,” BIF said in a statement.

In contrast to COAI, BFI said that while the revised price may appear to be only 35 per cent below the previously recommended price, “this may be the best possible under the circumstances, since the indirect benefits from a 30-year tenure and easier payment terms would be quite substantial”.