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India Is Top Class Telecom Investment Destination

India as a destination for telecom is world class and the spectrum auction could be expected to be utilised well by the telcos given India’s communication potential, Telecom Secretary Anshu Prakash has said.

“India as a destination for telecom (investment) is top class,” Prakash told IANS in an interview.

His assertion comes as in recent times, Vodafone Group’s comments on pulling out from India unless relief given on Adjusted Gross Revenues have hit the headlines.

In November, Vodafone Group’s CEO Nick Read had highlighted the stress in the sector after Supreme Court’s verdict on AGR dues. However, he had later said he was misquoted. Earlier the same month, Vodafone Idea’s chairman K.M. Birla said that without sufficient relief, the telco will have to shut down.

Telecom Minister Ravi Shankar Prasad has clarified that the government does not want monopoly in telecom sector. Days after Vodafone CEO’s exit threat, Finance Minister Nirmala Sitharaman had even said that the government doesn’t want any telecom company to shut its operations in India.

Both Vodafone Idea and Bharti Airtel posted huge losses in Q2FY20. While Vodafone Idea recorded a loss of Rs 50,921 crore, Bharti Airtel’s loss figure for the quarter stood at Rs 23,045 crore.

The Digital Communications Commission – the policy making arm of the sector on Friday cleared TRAI recommended price based auction of spectrum including 5G spectrum for the first time at a value of Rs 5.22 lakh crore.

“The DCC has decided that the TRAI recommendation be accepted and we are going to auction 8305 Mzh and we hope to have this auction some time in March or April next year. We have already floated the tender for the auctioneer and the bids will be opened early next year some time in January. The reserve price added together comes to about Rs 5.22 lakh crore,” the secretary said.

He also said the “if the auction is to happen in April, moving backwards, Cabinet nod has to come before at least two months. So it may be in January when Cabinet approval will be sought.

He also said that it will not be fair to give what could be the revenue amount collected from the sales or how much spectrum will be sold.

Asked if the telcos are in a state to bid for the auction given that they will have to pay hefty amount as AGR dues to the Department and if the Trai’s decision to examine setting a floor rate for the tariffs as well as the tariff hikes of the telcos will have any positive impact on their financial health, Prakash said: “At is for the regulator to decide about the tariff, but we are hopeful that given the rapid growth of mobiles and telecom in India the companies will certainly do well. Our data consumptions and voice calls as well as tele density, rapid expansion of network , all indicators are that we should do well”, he said.

This is the first time the government has made the changes in payment schedule.

“We have made the cash flow requirements more practical. This will help. No entire auction price is to be paid upfront. Successful bidder will pay 10 percent and 20 percent upfront and remaining amount will have to be paid one month prior to the spectrum availability,” he said.

Reacting to the government decision to hold auction amid stressful situation, operators body COAI said the DCC’s decision to proceed with spectrum auctions in the near future may be forth with challenges. With spectrum reserve prices 4 to 6 times higher than that of similar spectrum sold recently in several countries, high levels of debt and prevailing financial stress in the sector, “TSPs will find it very difficult to raise funds to participate in the auctions,” DG Rajan Mathews said.―Silicon India

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