TRAI Has Failed to Understand Paying Capacity of Telcos: CUTS International

Telecom Talk, April 13, 2022

In its recommendations for the 5G spectrum auction, the Telecom Regulatory Authority of India (TRAI) has slashed the reserve price of spectrum by 35%. The recommendations have left many disappointed.

Pradeep S Mehta, Secretary General, CUTS International, said the TRAI has given some relief to the telecom sector by reducing the reserve price of the airwaves. However, the price reduction wasn’t enough.

As per Mehta, the regulatory body has failed to recognise the paying capacity of the telcos.

COAI Also Disappointed with TRAI
The announcements from TRAI have been deemed “disappointing” by the telco body, Cellular Operators Association of India (COAI).

COAI has suggested TRAI to revisit the spectrum recommendations as the reserve price reduction is just not enough. Back in 2018, TRAI had suggested a reserve price of Rs 492 crore per MHz of spectrum in the 3300-3600 MHz band. But the C-band spectrum wasn’t made available during the auctions because it wasn’t freed in enough quantum.

2022 will be the first time the Department of Telecommunications (DoT) will allow participation in the auction for the C-band spectrum. It has been recognised as vital for rolling out new 5G networks.

From the old reserve price of Rs 492 crore per MHz of the C-band spectrum, TRAI has this time recommended that the reserve price should be at Rs 317 crore. It is worth noting that COAI had requested for the reserve price of the airwaves to be reduced by 90%, but this price reduction is not near that.

According to Mehta, during the upcoming 5G spectrum auction, many of the 5G bands will go unsold, or the government won’t earn the kind of revenues it thinks it will from the telecom sector. This is because the telcos won’t participate in the auctions in a complete capacity and manner.

5G spectrum auctions are expected to take place as per schedule, and India might see its first live commercial 5G network by the second half of this year.

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