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DCC Clears 8,300 MHz Spectrum Auction Worth Rs. 5.22 Lakh Crore

The Digital Communications Commission (DCC), on Friday, green-lighted the Rs. 5.22-lakh-crore spectrum auction plan involving 8300 MHz of airwaves across 22 circles. The sale is likely to take place in March-April.

The decision marks no change in the reserve pricing of the spectrum finalised by the Telecom Regulatory Authority of India (TRAI).

The bids for the spectrum will be opened on January 13, Anshu Prakash, Secretary, Department of Telecommunications, told reporters here post the DCC meeting.

6,050 MHz for 5G

Of the total spectrum available, 6,050 MHz will be available for 5G, and the government has kept aside spectrum for BSNL and the Railways. Around 225MHz of 4G spectrum are kept for BSNL, Prakash said.

“We are also auctioning spectrum which are going to be vacated because, since the auction was held in 2016, networks have expanded…more bandwidth is required…density of telephone is increasing/ usage/data is increasing and some licences are also expiring. So, it was decided that all spectrum be put to auction,” he said.

The additional spectrum, made available following the expiry of licence, will come from Reliance Communications and Bharti Airtel in eight circles and Vodafone and Idea Cellular in four circles each.

Simpler upfront payments

One important change the DCC is introducing in the upcoming auctions is that it has made upfront payment for the immediate available spectrum simpler.

Successful bidders will be required to make only 10 percent upfront payment for sub-1 GHz band and 20 percent for above 1 GHz band for the set of spectrum that will not be available after 6 or 12 months and balance before 1 month of their availability. “Telecom operators will have to make upfront payment of 25 and 50 percent only for spectrum that will be available within a month from the auction,” Prakash said.

Based on views sought by the government, TRAI on August 1, 2018, had recommended auction of spectrum in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz and 3400-3600 MHz bands.

However, given their financial condition, operators including Bharti Airtel and Vodafone-Idea had opposed the auctions. In particular, operators found the pricing of the 700 MHz, at Rs. 6,568 crore, too high though it had been brought down from the 11,485 crore set in the 2016 auction (it remained unsold then).

Reacting to the announcement, the Cellular Operators Association of India (COAI) said the DCC’s decision to proceed with spectrum auctions in the near future is fraught with challenges.

“With spectrum reserve prices four to six times higher than that of similar spectrum sold recently in several countries, and with high levels of debt and prevailing financial stress in the sector, telecom service providers will find it very difficult to raise funds to participate in the auctions,” Rajan S Mathews, Director General, COAI, said.

“It will be prudent to let the sector regain some financial strength from the recent initiatives undertaken before scheduling the auction. The interim period can be used to design and test India-specific 5G use cases,” he added.—The Hindu Business Line

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