In the upcoming auctions, telcos seek spectrum locked in insolvency

Telcos have asked the Telecom Regulatory Authority of India (Trai) to include spectrum tied up under insolvency proceedings in the upcoming auctions. 

Some carriers are of the view that since the validity of the spectrum may be coming to a close, they should be reverted to the spectrum pool held by the government and all available airwaves must be put to sale. 

Airwaves with Reliance Communications and Aircel — acquired through auctions in 2016-17 with a validity of 20 years — have been tied up due to insolvency proceedings. 

The matter had reached the Supreme Court where the Centre argued that airwaves belonging to the government were a national asset, not fully owned by companies, and therefore, cannot be traded. 

Lenders and resolution professionals under the insolvency bankruptcy code (IBC) see spectrum as key collateral for recovering debt. The apex court reserved its verdict on treatment of spectrum in bankruptcy cases, on November 17.   

A senior industry executive said, “Since the spectrum is tied up, its value cannot be determined unless it is reverted to the government.” 

“The validity of the spectrum is also coming to its end. So, will the insolvency proceedings continue if the asset itself no longer belongs to the service provider, according to government rules of allocation of spectrum,” he asked. 

In representations to the regulator, Bharti Airtel has noted that if included, the airwaves would enable telcos to use the spectrum more efficiently and may provide revenue to the exchequer. 

“Spectrum currently locked in insolvency proceedings before the National Company Law Tribunal (NCLT) or the National Company Law Appellate Tribunal (NCLAT) remains an unproductive national asset. Its prompt inclusion in upcoming auctions will prevent further value erosion. It would also give transparent access for all service providers, and enable efficient, demand-driven utilisation,” Bharti Airtel said in its submissions to the regulator.

 

The company has said that ensuring the timely release of all spectrum in existing bands, including balance inventory, refarmed and surrendered bands, and spectrum under insolvency, will sustain a competitive, transparent, and forward-looking spectrum ecosystem that maximises public value and sectoral growth.

 

Telcos have told the sector regulator that all available airwaves including in the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz bands should be put to auction in the forthcoming auction.  "Fragmentation of the bands or lower availability will be a retrograde step and consequently not be sufficient for deployment of 5G by four operators as only 4G can be deployed in the limited spectrum bandwidth," the Cellular Operators Association of India (COAI) said in its submission.