5G Spectrum
• The Telecom Regulatory Authority of India (TRAI) recommended the auction of spectrum for offering 5G services for the first time in the country at a pan-India reserve price of about ₹492 crore per MHz.
• In its recommendations, released the regulator has also called for over 43% reduction in the reserve prices of 700 MHz band spectrum — sought-after for high speed services.
• It had no takers in the 2016 auctions due to high pricing.
• The recommended pan-India reserve price for 700 Mhz now is ₹6,538 crore per MHz as opposed to ₹11,500 crore last time.
• The last auction for spectrum was held in October 2016, wherein around 60% spectrum remained unsold, with the government garnering over ₹65,000 crore.
• Since then, the industry has witnessed strong consolidation, with only three main players – Bharti Airtel, Vodafone-Idea and Reliance Jio, left in the field.
• For 1,800 MHz spectrum – widely used for offering voice services — the reserve price of ₹3,285 crore has been recommended. For spectrum in 800 MHz band, 900 MHz band, 2100 MHz band, 2300 MHz band and 2500 Mhz band, the reserve price has been kept at ₹4651 crore, ₹1622 crore, ₹3399 crore, ₹960 crore, and ₹821 crore, respectively. The prices for 2300 Mhz, 2500 Mhz and 3300-3600 Mhz are for unpaired spectrum.
• The regulator also pointed out that there is an “urgent need” of audit of all allocated spectrum both commercial as well as spectrum allocated to various PSUs and government organisations. This should be done by an independent agency on a regular basis.
• For the 5G airwaves, i.e. the spectrum in 3300-3600 MHz, the regulator said it should be put to auction in the block size of 20 MHz.
• To avoid monopolisation of this band, there should be limit of 100 MHz per bidder, it added.
• While suggesting that there should not be any roll-out obligations on this band, TRAI said spectrum trading in this band should be allowed after a lock-in period of 5 years as opposed to 2 years to avoid misuse.
• While most stakeholders were of the view that the industry is going through a phase of substantial mergers and acquisitions and it is important to allow the market to settle down.
• Concerns have also been raised in the recent past about the financial health of the sector and its revenue growth as a result intense competition.