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5G spectrum sale: Trai rejects request to review base price

FE Bureau
Trai, spectrum prices, spectrum sale, Broadband India, telecom, telecom sector,

The Telecom Regulatory Authority of India (Trai) on Monday stuck to its recommendation on the reserve price of spectrum, including 5G band, which the government wants to put up for auctions later this year.

Last month, amid an industry disquiet over the pricing of spectrum, Digital Communications Commission (DCC) had decided to ask Trai to reconsider its spectrum recommendations, to ensure competition and greater participation of larger set of players in auctions slated for 2019.

DCC felt that Trai should revisit its 2018 suggestions keeping in mind the government’s larger objective of digital proliferation, broadband for all and inclusive 5G services.

In its detailed response to the department of telecommunications (DoT) on Monday, Trai said it had considered all the relevant factors, including the methodology, assumptions, developments between the spectrum auction in 2016 and its suggestions of August 1, 2018, and the rationale for spectrum valuation and reserve price while giving its recommendations. "In view of the above, the authority reiterates the spectrum valuation and reserves prices as contained in its recommendations dated August 1, 2018," Trai said.

The regulator has, however, yielded ground on the issue of lock-in period it had previously recommended for spectrum in 3300-3600 MHz band (for eligibility on spectrum trading). It has now suggested a lower lock-in period of two years for this band against five years prescribed earlier.

"Authority recommends that no roll out obligations should be mandated for spectrum in 3300-3600 MHz band. Further, lock-in period for spectrum in this band for becoming eligible for spectrum trading should be same as in other bands that is two years," Trai said.

Trai had in August, 2018 recommended auction of about 8,644 MHz of spectrum across bands at an estimated total base price of `4.9 lakh crore, but the financially-stressed industry that is reeling under high debt had argued that proposed prices are unaffordable and exorbitant.

Some industry players had pointed out that the average price of 5G band auctioned in countries like South Korea, Spain, the UK and Italy comes out to be `84 crore/MHz, whereas Trai's recommended price for the same band is 5 to 6 times higher at `492 crore/MHz. Trai on Monday also asserted that it may not be correct to assume that only the existing licensees will participate in the auction. "The auction is an open process and there is always a possibility of additional players participating in the process," Trai said.