At a time when mobile operators and the government are preparing for roll-out of 5G services, the Telecom Regulatory Authority of India (Trai) has issued recommendations of prices for airwaves in the 3300-3600 MHz band at a price of Rs 492 crore per MHz, significantly lower than the price of spectrum in other bands.
The said frequency is considered to be ideal for 5G services given its propagation characteristics. Further, seeing how, not even a single bid was received in 2016 auctions for the spectrum in 700 MHz band, the sector regulator has suggested a cut of around 50 per cent in price to about Rs 6,568 crore per MHz compared with around Rs 11,485 crore earlier.
For 5G spectrum in 3300-3600 MHz band, Trai said that the minimum block size should be of 20 MHz. However, to avoid monopolisation, it has proposed a limit of 100 MHz per bidder. Since operators are allowed to trade their partial or complete spectrum holding to another operator, it said that the limit of 100 MHz spectrum in 3300-3600 MHz band shall also apply for spectrum trading. For the 800 MHz spectrum, Trai has pegged a price of Rs 4,651 crore per MHz, down 20 per cent from the previously recommended price. This band of spectrum is currently being used by operators to deploy 4G services. Trai has also recommended that the entire spectrum — 4948.55 MHz — available should be put up for auction without giving any time frame within which the auctions should be held.
In the 2016 auctions, the government had mopped up a total of Rs 65,789 crore, 4 per cent over the reserve price, from the country’s six operators that participated in the bidding. However, this was a lukewarm response as only 965 MHz spectrum got sold against a total of 2353 MHz put up for sale, meaning that only 40 per cent got sold. While the 700 MHz band saw no takers, only 15 MHz spectrum was sold in the 800 MHz band out of a total of 73.75 MHz. In 1800 MHz, 175 MHz was sold against 221 MHz put on sale. In 2100 MHz only 85 MHz was sold against 360 MHz. In 2300 MHz all the spectrum was sold, whereas in 2500 MHz 370 MHz was sold against 600 MHz.
“We are glad that the government has decided to bring down the price of spectrum, especially in the 700 MHz band. It is, however, important to note that considering the current financial stress the industry is going through, lowering the spectrum price alone doesn’t fix anything. Until and unless the spectrum usage charges, licence fees and other levies are lowered as well, the industry may not be able to cope with the technologies required to roll out 5G,” said Rajan S Mathews, director general, COAI.