Terming as a “missed opportunity” the non-bidding for the high quality but expensive 700Mhz in the just concluded spectrum auction, Bharti Enterprises Chairman Sunil Mittal today said the government needs to have a relook at the pricing of the particular band.
“Three or four solid networks around the 700Mhz would have taken care of a lot of rural broadband networks. This is a missed opportunity. I hope the government will look into this and correct that particular part,” Mittal said here at the India Economic Summit organised by the WEF and CII.
India’s biggest-ever spectrum auction ended yesterday without yielding the expected results with telecom players placing bids worth just Rs 65,789 crore in five days, leaving nearly 60 per cent of airwaves, including premium 4G bands, unsold. The auctions could have fetched Rs 5.6 lakh crore to the exchequer if all spectrum was sold at the reserve price.
According to the industry, the premium 700 MHz and 900 MHz spectrum found no takers, mainly because of high reserve or auction start price set by the government. The 700MHz band alone had the potential to fetch Rs 4 lakh crore, when sold at the base price.
“I have always maintained that. The pricing, you yourself have seen. Nearly Rs 60,000 crore for a small little tiny 5 MHz, it was bound not to get any response. Nobody should be surprised,” Mittal said when asked if the telecom companies did not bid for 700 Mhz band due to the high pricing.
Lamenting on missing out on the 700MHz, he said it is truly a very high quality spectrum, “which in fact Sri Lanka has not got it from broadcasters as yet, we have been able to get it, still have not been to put into good use”.
Although only 40 per cent of the spectrum that was put up for auction was taken, Mittal refused to call the process a failure.
“It is not a failure. It is USD 10 billion, Rs 66,000 crore (auction). Why do you call it a failure? I think the government did very well by putting on the table a lot of spectrum and it must be congratulated for running a fantastic, open process,” he said.
When asked whether service quality will improve now as more airwaves are available, he said: “In the coming months, you will see massive improvement across the country, not just from my company but all the industry players who have participated in the auction.”
Stating that the ingredient that drives high quality networks is “clearly nothing but spectrum”, Mittal said: “India is finally getting out of fractured spectrum. It was earlier very small, it was then fractured among 12 players, we are getting down to four players now and spectrum will not be an issue. This industry is also investing enough and more towers are coming up.”
He said that earlier the Indian spectrum position was woefully inadequate when compared with any other parts of the world.
“We have come from that problem in a dramatically quick way and fast manner… I think the government is trying to harmonise lot of spectrum. A lot of spectrum have been put on the table, parts in section, and segments of that spectrum are extremely expensive,” he added.
On whether the amount of money that Airtel and Vodafone had spent on spectrum auction was a response to the capital pumped by Reliance Jio, Mittal said: “People have their own spectrum gaps, people have gone for what they needed.”
Market leader Bharti Airtel acquired 173.8 Mhz spectrum in bands of 1800MHz, 2100 MHz and 2300 Mhz through auction for Rs 14,244 crore in circles including Kerala, Assam, Maharashtra, Delhi, Mumbai and North East.