Govt will review spectrum price for this year’s auction: Prasad2 min read . Updated: 14 Oct 2019, 11:11 PM IST
- Minister’s remarks come as a relief to debt-laden telecom firms clamouring for lower spectrum prices
- DoT will review prices, said Ravi Shankar Prasad at the India Mobile Congress
New Delhi: The government is aware of the concerns raised by mobile service providers about expensive spectrum, Union telecom minister Ravi Shankar Prasad said, adding the department of telecommunications (DoT) will review prices and expects to see a healthy competition among operators for upcoming auctions.
Prasad’s statement comes as a relief to telecom operators clamouring for lower spectrum prices as they struggle with rising debt, mainly on account of airwaves bought in previous auctions, amid a brutal tariff war.
“Spectrum auction will be conducted in this financial year (2019-20) itself. We are also in the process of undertaking some reform in the spectrum pricing," Prasad said at the inaugural session of India Mobile Congress (IMC).
Apart from 4G spectrum, India is planning its first auction of 5G airwaves this year.
The government did not auction any spectrum in 2017-18 and 2018-19. In 2016-17, it raised ₹65,789 crore through the sale of spectrum at base price, a fraction of the ₹5.63 trillion worth of spectrum it had offered for sale. While the total spectrum put up for sale was 2,354.44 megahertz (MHz) across seven bands, the government managed to auction just 965 MHz. There were no takers for 4G spectrum in the 700 Mhz band.
Telecom operators have always complained that compared to the rest of the world, airwaves in India are priced exorbitantly. In fact, Bharti Airtel chairman Sunil Mittal in February said the telecom company would not buy any spectrum at the base prices suggested by the telecom regulator in the 3,300-3,600 MHz band, the first band identified for 5G in the country.
Even after the DoT asked the Telecom Regulatory Authority of India (Trai) in July to review reserve prices of spectrum that it had suggested in August last year given the government’s objectives of deploying 5G for social sectors and ensuring broadband for all, the regulator stuck to the spectrum pricing architecture it had suggested earlier.
“Prices for 5G spectrum need to be critically looked at," said Mahendra Nahata, board member, Reliance Jio Infocomm Ltd. “Higher floor prices will lead to 5G networks being unviable and therefore getting delayed. An equilibrium, therefore, needs to be established between government revenue and overall growth," Nahata said at the inaugural session of IMC, now in its third edition.
Jio also urged the government to avoid long delays in spectrum auction and ensure that airwaves are continuously available to operators between two auctions.
Vodafone Idea chairman Kumar Mangalam Birla sought an “enabling regulatory environment" in the telecom sector so that companies can make the “necessary investments".
Mukesh Ambani of Reliance Industries and Sunil Mittal of Bharti Enterprises skipped the IMC, the first time in its three years. Ambani’s daughter Isha and son Akash, and Mittal’s son and founder of Hike Messenger Kavin Mittal, who were expected to participate in a panel on “next generation leaders" were absent as well.
The absence of top leaders at the expo comes at a time when their telecom companies engage in a fresh battle over the interconnect usage charges. The war of words erupted last week when Jio, India’s only profitable telecom operator, said it will start charging for calls made to rival networks at 6 paise a minute, reneging on a promise to keep calls free. IUC, which has been set at 6 paise a minute, is levied by mobile networks handling incoming calls from rival networks.