Spectrum auction: DoT circulates Cabinet note for comments, keeps 5G out

“We have not included 5G spectrum in the proposal. The companies are going through financial crisis and, therefore, we may not get the desired response for the 5G spectrum,” an official said
The Department of Telecommunications has circulated a Cabinet note seeking comments for conducting spectrum auctions, keeping aside the coveted 5G airwaves from the offering.

The department feels the industry does not have the appetite to bid for the high technology airwaves as it is reeling from the adjusted gross revenue (AGR) issue.

“We have not included 5G spectrum in the proposal. The companies are going through financial crisis and, therefore, we may not get the desired response for the 5G spectrum,” an official said, adding this was the reason the department had skipped that in the note.

The proposal essentially includes the airwaves, licences of which are due to expire in the next calendar year, and some of the new spectrum in those frequency bands.

The premium 700 megahertz (MHz) spectrum that went unsold in the 2016 auctions will be offered this time as well. The base price for the band, considered efficient for deploying 4G LTE networks and has greater structural penetration, has been fixed by the Telecom Regulatory Authority of India (Trai) at Rs 6,568 crore per MHz, 43 per cent lower than Rs 11,485 crore set in the 2016 auction.

In August 2018, Trai had suggested that the sale of 8,093 MHz of radio waves used for telecom services on 5G and other bands should be auctioned at a starting price of over Rs 5.7 trillion.

Trai said the 3,300-3,600 MHz band, expected to be the primary band for 5G services, should be auctioned as a single band and in blocks of 20 MHz each at Rs 492 crore per MHz. Old telecom operators had called the rate exorbitant, arguing that the average price of 5G band auctioned in countries like South Korea, Spain, the UK, and Italy worked out to be Rs 84 crore per MHz.

Of the 5G spectrum, Indian Space Research Organisation requested that 25 MHz (from 3,400 MHz to 3,425 MHz) be left untouched. Even the Ministry of Defence has a sizeable portion of the spectrum and is not ready to part with it. This is another reason for keeping the 5G airwaves out of the proposed auctions, the official quoted above said.

The sector is currently dealing with the AGR issue, which has forced major telecom players — Vodafone Idea and Bharti Airtel — to arrange funds for making payments as assessed by the DoT.

According to the government’s calculations, AGR liabilities of Vodafone Idea stand at around Rs 53000 crore and that of Bharti Airtel at Rs 35,500 crore. Both companies have made part payments towards these liabilities.



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