Lower price of air­waves, don’t de­lay auc­tion, says reg­u­la­tor

Mint Asia ST - - News - BNY AVADHA PA NDEY


tele­com reg­u­la­tor on Wed­nes­day, 1 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 of 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 roll-out of 5G ser­vices, should be auc­tioned as a sin­gle band and in the block size of 20MHZ each.

The govern­ment has not auc­tioned any spec­trum in 2017-18.

The reg­u­la­tor’s rec­om­men­da­tions come at a time when the tele­com sec­tor is reel­ing un­der a debt of ₹ 7.75 tril­lion as on 31 March 2017, 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 the Voda­fone-idea com­bine, are left to fight it out with Jio.

Though the sug­gested price cut is a step in the right di­rec­tion, given that the op­er­a­tors had sought cheaper spec­trum, it re­mains to be seen whether the debt-laden in­dus­try will have the ap­petite to par­tic­i­pate in an auc­tion if it were to hap­pen any­time soon.

More so, banks have also been re­luc­tant to back tele­com com­pa­nies. Be­sides, the govern­ment will also have to take a call, given that cheaper spec­trum would trans­late into lower rev­enue col­lec­tion.

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