Thursday

Telecom Operators Again Plead Trai for Reduction in Spectrum Prices in Upcoming Auction


Highlights


  • The upcoming auctions are going to have a base price of 3.5 times as compared to the previous auctions

  • The 700 MHz spectrum will receive a price cut of 43% in the upcoming auction



The Indian telecom operators have been saying that the pricing of the spectrum in the upcoming auctions should be brought down to make the spectrum more affordable. In a latest development, the telecom operators have reiterated their demand for more affordable spectrum prices to the Telecom Regulatory Authority of India (Trai) as per a new ET Telecom report. It is worth noting that Trai has already suggested pricing for the spectrum which are to be put on for sale in the upcoming auctions. The telecom operators have requested the telecom regulator to think upon the spectrum prices for the financial health of the telecom industry.


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Upcoming Auction to be 3.5 Times in Pricing as Compared to Previous Auction


Ravi Gandhi, the chief regulatory officer for Bharti Airtel remarked in an industry event, “…the paying capacity of the operator also should be one of the important criteria while keeping the spectrum pricing.” Gandhi also added that the government should reconsider the spectrum usage charges, license fees and other charges need to be factored in while coming up with spectrum prices. Another charge which the telcos have urged to rethink about, is the charge for unused spectrum which is currently charged by the government.


The comments from the regulatory official of Bharti Airtel came in the run-up to the largest spectrum in the industry which is expected to take place in the industry. In the upcoming auction for 4G and 5G spectrum, the government will be putting 8,293.95 MHz of airwaves for sale at the base price of Rs 5.77 lakh crore. It is worth noting that the base price for the spectrum is 3.5 times of the 2,354 MHz of spectrum which was put for auction in the year of 2016. The base price of the spectrum in the previous auction of 2016 was Rs 5.63 lakh crore.


Telcos Urge Trai to Rethink Spectrum Prices


The telecom operators have been against the highly priced spectrum ever since the telecom regulator suggested prices for the airwaves. Trai in its suggestion has stated the sale of 20 MHz blocks of 5G spectrum in the 3,300-3,600 MHz band at a price of Rs 492 crore per unit. There is also the matter of 700 MHz premium spectrum which couldn’t find any buyers in the previous auction of 2016 because of its exorbitant prices. To make this spectrum more affordable, Trai has suggested a cut of 43% which would bring down the price of the spectrum down to Rs 6,568 crore a unit.


V L Shankar, senior vice president for Reliance Industries said, “…ultimately what is going to drive growth as we have seen in our company and in other companies that there are two important things.” He further added, “One is affordability of the device which has to be the smartest at the lowest cost. Second, service has to be priced lower. And you want make services lower and to do that, base price has to be lower.” The telecom market leader, Vodafone Idea has also supported the same opinion of reduction in prices to provide better services to the customers.

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