Trai chairman R.S. Sharma.  (Photo: Ramesh Pathania/Mint)
Trai chairman R.S. Sharma. (Photo: Ramesh Pathania/Mint)

Telecom regulator sticks to spectrum pricing

  • Trai says it has suggested the prices after taking into account stakeholders’ feedback and has given that to govt
  • In August 2018, the Trai had suggested that 492 crore should be the base price for per MHz of 3,300-3,600 MHz band

NEW DELHI : The Telecom Regulatory Authority of India (Trai) has stuck to its earlier recommendations sent to the department of telecommunications (DoT) on base price and valuation of spectrum for the upcoming auction, including those for 5G airwaves.

“Trai has recommended the reserve pricing after taking into account the feedback and comments from various stakeholders and has given that to the government. The government has also apparently accepted those reserve prices and it is for the government to decide the timing of the auction. Stakeholders will decide whether they want to participate in the auction or not," Trai chairman R.S. Sharma said on Wednesday.

The sector regulator’s comments come a week after Bharti Airtel said that it would not buy spectrum at the recommended prices.

“Trai had recommended (prices) on the 3.5 GHz band close to 49,000 crore or 50,000 crore for 100 MHz (megahertz) of spectrum... 5G requires large blocks of spectrum. So at 100 MHz, 50,000 crore is just something that we can’t afford and we believe it’s too high-priced. So we will not pick it up at those prices," Bharti Airtel chief executive officer Gopal Vittal had said in an earnings call on 5 February.

In August 2018, the telecom regulator had suggested that 492 crore should be the base price for per MHz of 3,300-3,600 MHz band.

In June 2019, the government asked Trai to review its suggestions as it was worried that the demand for spectrum is likely to be subdued because of consolidation in the market as a result of which there are effectively only three private telecom service providers, Reliance Jio, Bharti Airtel, and Vodafone Idea.

However, in July 2019, the regulator said it will stick to its stand on pricing for the next spectrum auction as “it is an open process and there is always a possibility of additional players participating in the process".

Thus, in December 2019, DoT finally accepted the regulator’s recommendations and approved the prices for the spectrum auction scheduled to be held by April.

The government plans to put 8,300 MHz of spectrum under the hammer at a reserve price of 5.23 trillion.

Of the 8,300 MHz of airwaves the government plans to offer, 6,050MHz have been allocated for 5G.

The band allocation for 5G of 3,300-3,600MHz has been priced at 492 crore per MHz

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