5G kept out of the offer as Cabinet okays telecom spectrum auction

The Centre on Wednesday set the ball rolling for 4G auction that is expected to fetch the exchequer Rs 3.92 trillion by offering 2,251 megahertz (MHz) airwaves. The coveted 5G spectrum has been kept out of the offer.

The auctions are slated to be held in March 2021 and the notice inviting applications is expected by the end of this month. The last spectrum auctions were held in October 2016 and the government earned Rs 65,789 crore from them.

While briefing mediapersons on the outcome of the Cabinet meet, telecom and IT minister Ravi Shankar Prasad said, “It has been decided by the Cabinet to auction 2,251 MHz spectrum by March 2021.”

The bands that have been put on offer are – 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz.

The 3,300 MHz to 3,600 MHz bands – or the 5G spectrum bands – didn’t make the cut. The base price for the 5G spectrum is around Rs 3.63 trillion.

“The lucrative 5G bands, which would have garnered more funds for the government, have been set aside. The ones on offer are not as attractive and may not serve the purpose of fundraising for the exchequer,” a person in the know said.

The industry had been pitching for the 4G auctions to take place as some licenses in the bands were expiring in 2021.

The Digital Communications Commission, the apex decision making body of the department of telecommunications, in May, approved the spectrum auction plan subject to Cabinet approval.

MSTC has been selected to handle the spectrum auction. The public sector enterprise executed coal auctions in early 2015. 

They were held after the Supreme Court cancelled allocation of coal mines in September 2014. MSTC is also holding auctions for various central and state government departments.

The Telecom Regulatory Authority of India (Trai), in August 2018, came out with its recommendations on spectrum pricing, wherein the regulator reduced the base price of frequencies that went unsold in the 2016 auction.

The reserve price for the premium 700 MHz spectrum, which went unsold in 2016, was reduced by more than 40 per cent to Rs 6,568 crore per MHz all-India from Rs 11,485 crore in 2016.

Trai recommended a base price of Rs 4,651 crore for paired spectrum in the 800 MHz band covering 19 circles, Rs 1,622 crore per MHz for the 900 MHz band covering seven circles, Rs 3,399 crore per MHz in the 2,100 MHz band covering 21 circles and Rs 821 crore per MHz in the 2,500 MHz band covering 12 circles. 

It also suggested Rs  960 crore per MHz for unpaired spectrum in the 2,300 MHz band on a pan-Indian basis.

The spectrum bands from 3,300 MHz to 3,600 MHz, which are the 5G airwave bands, have been kept aside.