Trai suggests over Rs 7.5 L cr spectrum auction strategy
NEW DELHI: Setting the phase for the rollout of 5G services, telecom regulator Trai on Monday mooted a mega auction strategy valued at over Rs 7.5 lakh crore at the base price throughout numerous bands for radiowaves designated over 30 years.
Overall, the Telecom Regulatory Authority of India (Trai) advised about a 39 per cent reduction in the reserve or flooring price for the sale of spectrum for mobile services, consisting of the current 5G offering, as it aimed to match income expectations with the industry’s paying capability.
The guard dog has actually advised a mega auction plan of over Rs 7.5 lakh crore for over 1 lakh megahertz spectrum in case federal government assigns it for a period of 30 years.
In case of twenty years, the total value of the proposed spectrum auction will stand at around Rs 5.07 lakh crore at the reserve price, according to the back-of-the-envelop computation.
With big swathes of spectrum staying unsold in the last two auctions, Trai suggested to the government for selling airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and new slots of 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz.
It has actually suggested a lower reserve rate for all bands, compared to last suggested prices in 2018.
When contacted, Trai chairman P D Vaghela informed PTI that 5G recommendations have been framed after a “cautious analysis” following stakeholder consultation, and broad conversations.
Recommendations are in interest of telecom sector and the nation, Vaghela added.
On a 20-year circumstance, the floor cost in the 700 MHz band has actually been cut by 40 percent to Rs 3,927 crore per MHz for a pan-India spectrum while the exact same in 800 MHz has been reduced by 22 per cent to about Rs 3,620 crore per MHz, pan-India.
For the prime 5G frequency of 3300-3670 MHz band, the all-India reserve price adds up to Rs 317 crore per MHz, which is more than 35 per cent lower than the Rs 492 crore/MHz recommended by Trai last time around.
Trai has also mooted an almost 39 per cent lower base cost throughout all bands described it, as compared to the last time.
The transfer to cut the reserve rate follows more than 60 per cent of the spectrum put on the block at the auctions in 2016 and March 2021 remaining unsold.
The market has actually ever since been seeking reasonable rates in a basically three-player market where most airwaves typically get sold at the base rate. If the price is not in line with the industry’s expectations, the spectrum might remain unsold.
Bharti Airtel chairman Sunil Mittal had actually formerly mentioned “appropriate” prices of spectrum.
Just recently, telecom market body COAI had actually asserted that spectrum rates must be kept conducive to market conditions as 5G entails upfront capital financial investments with monetisation spread over a long-haul, and rates radiowaves high will just press the gamers up versus the wall.
Trai’s newest suggestions will set the foundation for spectrum auctions in 2022, to help with the rollout of 5G mobile services within 2022-23, by private telecom service providers.
The marketplace is tailoring up for the rollout of 5G services, that will usher in ultra high speeds and spawn new-age services and organization designs.
“The reserve price of spectrum allowance in case of thirty years should be equivalent to 1.5 times the reserve cost of spectrum allowance for 20 years for the particular band,” Trai stated.
In the millimetre band, that is 24.25-28.5 GHz band, all India base price adds up to Rs 7 crore per MHz.
Trai further stated that for the long-term growth and sustainability of the telecom sector, instilling liquidity and encouraging investment, the telecom provider must be allowed easy payment choices, consisting of part payment with flexibility of moratorium.
“To offer flexibility to the telecom provider, block size of 10 MHz for 3300-3670 MHz band and 50 MHz for 24.25-28.5 GHz band advised. Spectrum to be designated in a contiguous manner,” Trai said in a statement.
The sector guard dog stated that considering the realities that currently band prepare for the frequency range 526-612 MHz is yet to be specified by international bodies, and the advancement of the community in the 526-612 MHz frequency variety will spend some time and the ministry of info and broadcasting is utilizing the 526-582 MHz band extensively across the nation for TV transmitters, “the 526-612 MHz frequency range ought to not be put to auction in the upcoming auction”.
“DoT must bring out a prepare for refarming the 526-582 MHz band to be used for IMT releases. To make the 526-582 MHz band offered for IMT, DoT must work with MIB to prepare a strategy for an early migration from Analogue to Digital Transmission, so that the frequency band from the 526-582 MHz can be left for IMT services,” Trai said.
Unlike existing coverage-based rollout obligations, considering deployment of 5G network in 3300-3670 MHz and 24.25-28.5 GHz bands, simple network deployment-based roll-out conditions have been suggested for these bands.
Based on Trai, spectrum caps have actually also been rationalised. Overall cap across all bands has been gotten rid of.
Trai has actually recommended a cap of 40 percent on combined spectrum holding in sub-1 GHz bands. It has, nevertheless, recommended a cap of 40 per cent on combined spectrum holding in 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands, while a private band-specific cap of 40 percent for 3300-3670 MHz and 24.25-28.5 GHz spectrum bands has actually been suggested.
For ease of working, simple and transparent spectrum surrender standards with a charge of Rs 1 lakh per spectrum band per licensed service area has been suggested.
According to Trai, the spectrum for personal network can be designated administratively to the qualified Captive Wireless Private Network Consent holders/Licensees as needed for specified location on non-interference basis through a widely publicized online portal-based process in a reasonable and transparent way.
Prashant Singhal, international TMT emerging markets leader at EY described Trai’s recommendations on auction of 5G spectrum as a welcome relocation.
“In particular, decreasing 5G auction base cost in the 3,300-3,670 MHz band by approximately 36 per cent was much called for. Nevertheless, even with the reduction in the base price, 5G spectrum price in India is still greater, which is 2.6 X of Germany, 3.8 X of the UK, and 4.4 X of South Korea,” Singhal said.
The price needs to be further pruned to use budget-friendly 5G services throughout the country, Singhal argued.
“On the other hand, arrangement for surrender of spectrum is a great move. We need to thoroughly assess the mechanism and the business plan of such surrender,” he stated.
Released at Mon, 11 Apr 2022 17:41:17 +0000