Telcos, not Trai or govt, will decide spectrum price: Trai chief R S Sharma

Trai Chairman R S Sharma
The Telecom Regulatory Authority of India (Trai) is studying the comments of the Digital Communications Commission (earlier Telecom Commission) before sending its review on the reserve price and quantum of spectrum to be sold in the upcoming auctions.

“We would refer our comments back as soon as possible,” Trai Chairman R S Sharma told Business Standard in an interview on Thursday. He declined to indicate what his review decision would be on spectrum pricing in the backdrop of Union Telecom Minister Ravi Shankar Prasad making a statement in Parliament that the telecom sector is stressed and that the licence fee needs to be reduced drastically for telcos.

“We are in the process of preparing an action plan,’’ Sharma said.

Pointing out that 5G would help the telecom  sector in the country go places, Sharma said, “it would be transformational’’. From being a vertical not too long ago, telecom would be a horizontal story for service delivery with 5G as an enabler, he said. “The benefits would cut across health to energy and governance to infrastructure.’’

With 5G being key to numerous technological developments, is there a case for making the spectrum affordable by lowering the reserve price? To that, Sharma replied with a hint of irony that “the government has a right to give free of cost spectrum to everybody….’’ He clarified immediately that “in auction, Trai or the government doesn’t decide the price….It is the participant who decides the price.’’ 

In response to the Trai recommendations of August 2018 on auction of spectrum across bands including 5G, the top-most decision making body in the telecom department—DCC-- had last month asked the regulator to review its recommendations on the reserve price and quantum of airwaves to be put up for sale this year. In its June 14 reference, which Trai received a few days ago, DCC had also asked the regulator to ensure competition in the sector. 

Sharma said, “as per law, Trai should send the reference back to DCC within 15 days of receiving the comments. If it requires more than 15 days, we will inform the Department of Telecom that Trai comments cannot be given in a fortnight. That is a decision that we have to take.”

DCC sought a review of the auction reserve price in view of the overall financial stress in the telecom sector. However, Sharma said this was not unusual. “When was it that there was no stress in the telecom sector?” In August 2018, Trai had recommended the auction of about 8,644 MHz of frequencies across eight signal bands, including in 700 MHz, 800 MHZ, 3300-3400 MHz, 3400-3600 MHZ etc, at an estimated base price of Rs 4.9 trillion.

Trai had recommended a pan-Indian base price of Rs 492 crore per MHz for 5G radio waves while lowering the base price of frequencies that remained unsold in the 2016 auctions. Airwaves in the 3,300-3,600 MHz 5G band will be auctioned in the block size of 20 MHz.