5G spectrum auctions: DoT may not ask Trai for base price revision

The Department of Telecommunications (DoT) will soon seek suggestions from the Telecom Regulatory Authority of India (Trai) on 5G spectrum auctions.

The department will also seek views on the price discovery of the milimetre waves or the 2,600-2,800-megahertz (MHz) band. These airwaves are better suited to higher latency.

The 5G auction will include 3,300 MHz to 3,600 MHz bands, along with milimetre waves. The base price for the 5G spectrum is around Rs 3.63 trillion.

When asked whether the department would seek reduction in the base price of airwaves that went unsold in the previous auctions, officials at DoT confirmed that the government would not seek any price cut and it would be up to the regulator to decide. "We should be able to send our proposal to Trai very soon. We are ready," confirmed an official.

The recent round of auction — also the shortest in a decade — saw Reliance Jio snap up more than 50 per cent of airwaves on offer. The company paid Rs 57,122.65 crore — 60 per cent of this amount was spent on buying the 800-MHz band.

The entire spectrum offered by the government was sold at the base price.

Bharti Airtel bought Rs 18,698.75 crore worth of spectrum; the bulk of its purchase was in the 2,300-MHz band. Vodafone Idea spent Rs 574 crore at the auction.

Of the total available spectrum of 2,308 MHz, 855.6 MHz was sold. A total of 37 per cent of the spectrum by quantity and 19 per cent by value were sold. Nearly 65 per cent of the 800-MHz spectrum on offer and 89 per cent of the airwaves offered in the 2,300-Mhz band were sold.

Spectrum auction

• The DoT will seek views on the price discovery of the milimetre waves or the 2,600-2,800-megahertz band
• The 5G auction will include 3,300 MHz to 3,600 MHz bands, along with milimetre waves
• The base price for the 5G spectrum is around Rs 3.63 trn
• DoT officials say the government would not seek any price cut and it would be up to the regulator to decide
• The recent round of auction — also the shortest in a decade — saw Reliance Jio snap up over 50 per cent of airwaves on offer. The company paid Rs 57,122.65 crore — 60 per cent of this amount was spent on buying the 800-MHz band

Both 2,500 MHz and 700 MHz — premium spectrum — went unsold. The industry had opposed the steep reserve price recommended by Trai in certain bands.

In August 2018, the regulator came out with its recommendations on spectrum pricing, wherein it 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.

The band, however, went unsold in the recently concluded auctions as well. 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.