April 13, 2022
The Telecom Regulatory Authority of India (TRAI) has slashed the base price for spectrum auction by 35 percent from the proposed rates in 2018. The regulator has released the ‘Auction of spectrum in frequency bands identified for IMT/5G’ on Monday, sowing the seeds for auctioning of the C-band 5G spectrum by the government.
“While this 35 percent reduction in pricing will bring some relief for the telecom sector, it is nowhere close to what the telecom industry has been demanding. TRAI has failed to recognise the paying capacity of the telecom companies (telecos),” said Pradeep S Mehta, Secretary General, CUTS International.
In 2018, for the 5G spectrum band of 3300-3600 MHz, TRAI had recommended a price of ₹492 Crores per MHz. However, the 5G frequency band was not put up for sale in the previous round of auctioning because the frequency range could not be freed. Now, the telecom regulator has recommended a reduced price of ₹317 crore per MHz.
Earlier, the telecom industry body, Cellular Operators Association of India (COAI) had called for keeping market conditions to be conducive and for reduction of the 5G spectrum prices by as much as 80-90%.
Mehta stated that the unintended consequence of not having rationalised prices could mean that the cash-strapped telecos may not be able to afford the spectrum and it may go unsold. He pointed out that telecom companies will have to make capital investment and profitability from this investment in 5G will take time.
Mehta also said that going forward, it is now up to the Department of Telecommunication (DoT) to proactively conduct the auctions so that telecos can roll out 5G services and consumers can benefit from ultra-high-speed internet.
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For further details, contact:
Vijay Singh, at vs1@cuts.org