Trai slashes 5G spectrum base price in 3300-3670 MHz band by around 36%

The Telecom Regulatory Authority of India (Trai) has set the stage for next-gen spectrum auction by slashing the reserve price of 5G airwaves in the 3300-3670 MHz band by around 36 per cent.

It has approved setting up private networks by access providers and recommended an administrative allotment of spectrum, an idea opposed by telecom companies. These are part of the Trai recommendations, released on Monday.

Along with unsold spectrum in previous auctions, the regulator has recommended auctioning all available spectrum in new bands such as 600 MHz, 3300-3670 MHz, and 24.25-28.5 GHz.

In 2018, Trai had set Rs 492 crore as the reserve price per MHz of spectrum in the 3300-3670 MHz band. Now according to the latest recommendations, the price has been cut to around Rs 317 for 20-year allotment. While this works out to around 36 per cent reduction, it is much lower than the industry demand, which was up to a 90 per cent cut.

Even the reserve price of Rs 6.99 crore per GHz of the 24.25-28.5 GHz band is higher than the industry estimate, said industry sources. The reserve price for existing available spectrum in other bands such as 700 MHz has been proposed at Rs 3,920 crore per MHz.

Since last year, telecom companies have carried out 5G trials in the 700 MHz, 3.5 GHz, and 26 GHz bands. 

The government had earlier proposed carrying out spectrum auction by May or June. The regulator has rationalised spectrum caps and an easy surrender of spectrum. The regulator has set the rules for setting up private cellular networks.

“The Authority recommends that the spectrum for private network can be assigned administratively to the eligible captive wireless private network permission holders/Licensees on demand for specified geography on non-interference basis through a widely publicized online portal-based process in a fair and transparent manner,” Trai said in its recommendations.

Telecom companies have been opposing administratively allotting spectrum because they think this would not create a level playing field between them and such companies.

Ankit Agarwal, managing director at STL, said: “Initial estimates suggest around 35 per cent reduction in the spectrum pricing. This is a welcome move. It will play a pivotal role in bringing the country closer to its 5G dream. This will enable service providers to do additional capex and launch new-age services and business models.”