Telecom Minister Ravi Shankar Prasad has said that 5G spectrum auctions in India will take place by the end of 2019 or by early next year, reports The Hindu. He added, “the government has ensured that India’s auction of the spectrum will be done in a fair and transparent manner”. In June, the Department of Telecommunication (DoT) had outlined a plan to hold next spectrum sale by December 2019, however now it might get delayed till early next year.
Largest auction of airwaves: This would be the government’s largest spectrum auction, where over 8,200 MHz of airwaves at an estimated total base price of INR 5.86 lakh crore, will be up for sale, besides the sale of 4G spectrum. It is worth noting that the central government earned INR 65,789 crores from spectrum auctions of 2G, 3G, and 4G in 2016.
Concerns of telecom sector: Telecom Minister said, “DoT has noted the problems faced by the industry, which is reeling under the debt of INR 8 lakh crore and the government will give its support. He ensured “the government will be open to assist, facilitate, guide and motivate and in return, they would expect TSPs to reinforce their own management, technology, and services”. He added, “all policy initiatives have been done, starting from the spectrum trading to spectrum sharing. A communications policy is already in place”.
The telecom sector’s debt is nearly INR 8 lakh crore, with that of Bharti Airtel at INR 1.16 lakh crore and Vodafone Idea’s at INR 99,300 crore at the end of June quarter. Reliance Jio Infocomm is the only company that has registered profits in the telecom industry.
TRAI’s recommendations: The Telecom Regulatory Authority (TRAI) had suggested a base price for 5G airwaves at INR 492 per MHz. It proposed a sale of a minimum of 20 Mhz blocks, however, the DoT had asked TRAI to reconsider its recommendations. TRAI continued with its stand on the recommendations for pricing and said it had considered all the relevant factors, including methodology, assumptions, and developments in the telecom sector before giving its views.
India hasn’t had a spectrum auction for quite a while, and typically, governments use spectrum auctions to get money for other schemes. India seems to be in the midst of an economic slowdown, and it’s not clear whether the telecom operators will have the money to bid for more spectrum. Remember, India is already seeing high price competition in the telecom sector. What happens during auctions typically is that those telecom operators (except BSNL and MTNL) who end up buying more or the latest spectrum end up garnering most of the consumer base, while others slip into redundancy, unable to deliver a competitive quality of service. Thus, telecom operators are often compelled to bid for spectrum even if they’d rather not.