TRAI recommends cutting spectrum prices across bands by up to 40%

It has also suggested a 5G-dedicated Inter Ministerial Working Group

In a relief to the telecom sector, the Telecom Regulatory Authority of India (TRAI) on Monday slashed the base price for airwaves by up to 40% across all spectrum bands, including 5G airwaves.

The telecom regulator has also suggested that all available spectrum in the existing bands — 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz — should be put up for auction, along with airwaves in new bands such as 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz.

The DoT, in a letter to TRAI in November last year, had emphasised on the need to strike a balance between generating revenue and the sustainability of the telecom sector in a way that telecom service providers are in good health with sufficient capacities to make regular and substantial capital expenditure for transitioning to 5G technology. It had also highlighted that only 37.1% of the spectrum put to auction in the previous auction was acquired by telcos and that spectrum lying idle was a waste for the economy.

“The inputs received by the Authority during the consultation process also point to the need for further rationalisation of the reserve price,” the regulator said in the over-400 page recommendation.

The regulator has recommended slashing of reserve price across all spectrum bands by up to 40% for a 20- year period compared with the base price suggested in its previous recommendations. For 5G airwaves in 3300-3670 MHz band, all-India reserve price comes to ₹317 crore/MHz, lower by 35.5% from ₹492 crore/MHz recommended earlier. Similarly, the reserve price for premium 700 MHz band, which saw no takers in previous auction, had been cut by 40% to ₹3,927 crore/MHz, from about ₹6,568 crore/MHz.

In the last auctions held in March 2021, a total of 2,308.80 MHz spectrum worth ₹4,00,396.20 crore at reserve price was put to auction, out of which 855.60 MHz quantum was sold resulting in total winning bids worth ₹77,820.81 crore. No bids were received in 700 MHz and 2500 MHz bands.

The regulator has also sugested that the reserve price of spectrum allocation in case of 30 years should be equal to 1.5 times the reserve price of spectrum allocation for 20 years for the respective band. “For the long-term growth and sustainability of the telecom sector, infusing liquidity and encouraging investment, the Telecom Service Providers should be allowed easy payment options including part payment with flexibility of moratorium,” it added.