Govt working on having annual auction of spectrum

In what would be a major reform for the telecom sector, the government has started work on having annual auction of spectrum to ensure that the industry has enough supplies of the airwaves. The government is also working on a proposal of having real-time spectrum trading, on the lines of trading of electricity.

Top sources within the government told TOI that the matter of liberalised spectrum norms was discussed “at the ministry level and also at the PM’s review of the telecom sector”, and thereafter a reference has also been sent to sector regulator Trai.

Importantly, the proposal of annual auctions comes within two months of the government’s announcement of a bailout-cum-relief package for the telecom industry. Under this, the companies were given a new regime of lower taxes, longer spectrum holdings (from 20 years to 30 years in future sale), comfortable bank guarantees, and easier airwave surrender norms.

The idea of having annual spectrum auctions during pre-decided months is being considered with a timeline of fiscal 2023-24, as the government wants the industry to be assured of regular supplies. This would be crucial as technological advancements happen at a rapid pace and the need for airwaves may go up in view of new applications around internet of things (IoT), augmented and virtual reality (AR/VR), smart factories, autonomous driving, and immersive education and medical facilities.

“If the industry is assured of regular availability of spectrum, then there will be no mad rush to buy the airwaves at astronomical costs at the time of auctions, as has happened previously. Some of the earlier sales have seen companies go overboard during the bidding and thereafter hamper their financial positions, which has led to the deterioration of the health of the industry,” one of the sources said.

The government feels that to facilitate easier migration to new technologies such as 5G and even higher upgrades, spectrum should be made available in adequate quantities and at regular intervals. “A reference to Trai, seeking its recommendations on issues involved in auction of spectrum in different bands available for assignment to telecom companies, has been sent in September. We expect movement on this front over the coming months as Trai comes out with its set of recommendations and suggestions.” TOI