Spectrum auction back in the groove
DoTdialsTraitorevise700-MHz price;seeksviewsonbidsthisyear
Six months after a dull round of spectrum sale, the Centre is gearing up again for the bidding of airwaves that were left unsold last October. In fact, the Department of Telecommunications (DoT) has set the ball rolling by asking for the telecom regulator’s views on auctioning the remaining spectrum in 1,389 megahertz (MHz) this financial year (FY18).
This comes when the telecom industry is battling fierce competition and shrinking profits.
The National Democratic Alliance government has, in its communication to the Telecom Regulatory Authority of India (Trai), sought a price review of spectrum in 700 MHz, a band that remained untouched as telcos found it too expensive during last year’s auction. 700 MHz is considered premium due to its efficiency and reach. The regulator’s opinion on auction is expected to reflect an overall view on use of various spectrum bands, including 5G.
The quantum of airwaves that may be offered for bidding this time is 1,389 MHz, as only 40 per cent (or 965 MHz) of the total 2,355 MHz spectrum was sold in the previous round of auction.
According to a source, the base price for the 700 MHz premium band remains an issue that needs to be resolved between DoT and Trai. During discussions in the past, the ministry had suggested that pan-India floor price for the 700 MHz band should be in the same range as 800 MHz and 900 MHz bands.
But the regulator had argued that since it was a premium band, the price should be in the range of 1,800 MHz band.
During the October auction, the pan-India base price was fixed at ~11,485 crore per MHz for the 700 MHz spectrum despite top mobile operators pressing for downward revision.
The companies had argued that the ecosystem for providing services in the 700 MHz band was not developed and any sale would lead to under-utilisation of the spectrum for several years. This, they said, would block the industry’s finances.
Trai had countered, saying the cost of delivering mobile services in 700 MHz band was approximately 70 per cent lower than the 2,100 MHz band, which is widely used for 3G services. During the last round of spectrum auctions, the government received bids worth ~65,789 crore.
The expensive 700 MHz and 900 MHz bands failed to find any takers during the five-day long auction last year. The 700 MHz band was expected to fetch ~4 lakh crore for the government.
While a few circles, including 1,800 MHz and 2,300 MHz, garnered the maximum amount of bids, the industry had also shown interest in 2,100 MHz (3G/4G), 2,500 MHz (4G) and 800 MHz (2G/4G) bands.