Next spectrum auction likely in April-June 2020

MUMBAI: The government is working on holding crucial telecom spectrum auctions, where it expects to sell both 4G and 5G bandwidth, in April-June next year, said people with knowledge of the matter. “Final timelines have not been frozen yet… this is the tentative schedule,” one of them said.The government believes that tariff increases by the three non-state telecom operators along with a two-year moratorium on spectrum payments will give carriers enough financial strength to participate in the sale.However, the operators still maintain that base prices suggested by the Telecom Regulatory Authority of India (Trai) are too high, especially for 5G airwaves, and want sale deferred.Telecom minister Ravi Shankar Prasad recently told parliament the government won’t reduce the 5G base price as pegged by Trai. The Digital Communications Commission, the highest decision-making body in the telecom department, is set to meet shortly and may consider issues regarding the airwaves sale, including pricing.The government has made clear it won’t auction frequencies piecemeal, and that all available spectrum will be put up for sale.The person said telcos need bandwidth, especially with some of their airwaves expiring in 2021. “It is up to the government to hold the auctions, and it’s up to the operators to participate,” a second person said.On offer will be 8,293.95 MHz of 4G and 5G spectrum, which can fetch the government about Rs 5.86 lakh crore, if all of it is sold at base price.“If operators can bid for spectrum of insolvent companies like Reliance Communications (RCom), it means they need spectrum to run their network and therefore can participate in auctions as well,” said another person aware of the developments.“Those whose spectrum bands are nearing the expiry date will need more airwaves.”Analysts said Jio needs an early auction of 4G airwaves since a sizeable chunk of RCom airwaves in the coveted 800 Mhz band—which the Mukesh Ambani-led telco uses under a sharing pact--will expire in 18 circles in July-August 2021.They added that Bharti Airtel and Vodafone Idea will also need to buy back their expiring airwaves in eight circles each, but mostly in the less expensive 1800 MHz band, also used for 4G.But it is the price of the 5G band — seen as key to the next phase of growth in telecom — that the industry fears will push them into further debt.The sector regulator has suggested a base price for 5G airwaves of Rs 492 per MHz and has proposed a minimum sale of 20 MHz blocks. That would mean a telco having to spend close to Rs 10,000 crore for 20 MHz and Rs 50,000 crore for 100 MHz--rates that the companies have said are exorbitant.“Prices are still not appropriate and if the government decides to conduct auctions in next few quarters, it will push back the industry into further debt,” said Rajan Mathews, director general of the Cellular Operators Association of India (COAI), which represents Bharti Airtel, Jio and Vodafone Idea. He added that the recent price hikes were meant to cope with the AGR impact and will not be enough to help with paying for airwaves at auction.

from Economic Times https://ift.tt/2LlouSN