Govt Plans To Complete Spectrum Auction By Nov-End: Sources

New Delhi: The Department of Telecom plans to conclude spectrum auction by November 30 and the inter-ministerial panel, Digital Communications Commission, will meet after the third week of September to finalise the spectrum auction prices which are expected to be what the TRAI has recommended, highly placed sources said.

There may not be any new set of prices of the auction. “We are in the process of appointing an auctioneer soon,” the sources added.

Telecom Minister Ravi Shankar Prasad had said he hoped to complete the auction in the current calendar. Sources also hoped that despite telcos crying about their financial conditions, they all would bid for the auction at base price and the government would not have any problem in raising at least the expected revenue calculated on the base price and fully sold spectrum.

Asked about the industry’s financial health and their opposition to the Telecom Regulatory Authority of India’s (TRAI) set prices for the auction terming it higher, the source said, they (the telcos) would find a way. If banks are not giving them loans due to poor financials of the sector, they can approach other means of funding.

Shareholders themselves can pump in funds, it will be there issue where to arrange funds from, the sources added.

Trai had in August 2018 recommended auction of about 8,644 MHz of spectrum across bands at an estimated total base price of Rs 4.9 lakh crore, but the industry said the proposed prices were unaffordable and exorbitant. For instance, for the 5G band in the 3300-3600 MHz (5G), where prices had been given for the first time at Rs 492 crore per MHz, for a pan-India minimum block of 20 MHz, operators would have to shell out Rs 9,840 crore, which is seen as steep, which telcos say is uncompetitive.

Similarly, though Trai had reduced the reserve price by 43 per cent at Rs 6,568 crore per MHz for the premium 4G spectrum, still for a pan-India 5 MHz block, operators would have to shell out Rs 32,840 crore.

Going by global auction of 5G sepctrum, the price of Rs 492 crore per MHz for 5G spectrum was seen on the higher side, as the South Korean auctions which happened last year had the price at Rs 130 crore per MHz.

TRAI sources had said in India the spectrum is given for 20 years and in South Korea, it is 10 years. At the moment, the ecosystem for 5G services is not developed so even if auctions are conducted and operators win the spectrum, they will have to wait for a considerable period before it can effectively be used.