The Digital Communications Commission (DCC) will discuss the Telecom Regulatory Authority of India (Trai) recommendations on the 5G spectrum auction on Friday.
Sources said an internal committee of the department of telecommunications (DoT) has accepted most of the Trai recommendations, including that around the reserve price. But since the regulator has proposed to charge 1.5 times of the reserve price for buying spectrum for 30 years, the committee has suggested an option that telcos be allowed to buy spectrum for 20 years.
As part of the telecom reforms announced last year, the government had extended the tenure of spectrum to 30 years from 20 years. The final call around the spectrum tenure has to be taken by the DCC.
The commisison will also take a call on around 27.5 GHz to 28.5 GHz millimetre band spectrum and whether it should be put up for auction. The satellite firms have been demanding this spectrum, a call supported by Bharti Airtel. But Vodafone Idea and Reliance Jio want all the milli-metre band to be put up for auction. Trai has proposed co-existence of satellite firms and mobile operators in the band.
In its recommendations on April 11, Trai had reduced the reserve price of spectrum across bands by about 39%. But it had given the spectrum price for 20 years as has been the practice in the earlier auctions. But since in the upcoming auction, spectrum will be for 30 years, Trai had said the reserve price would be 1.5 times of the 20-year period. For perspective, with a 36% cut in reserve price of 5G spectrum in the 3,300-3,670 MHz at Rs 317 per MHz, operators can buy 100 MHz for Rs 31,700 crore against the 2018 price of Rs 49,200 crore. But getting it for 30 years, operators have to pay Rs 47,550 crore, which is not much lower than the earlier price.
Disappointed industry wants the prices to be lowered further as despite the cut, the rates are still the highest in the world.
The 5G auction is quite crucial this time as the government wants to roll out the services by August 15. In the March 2021 auctions, operators bought 855.60 MHz spectrum worth Rs 77,814.80 crore, out of the total 2,308 MHz of spectrum put up for sale at a reserve price of Rs 3.92 trillion. This means, only 37% of airwaves got sold and two bands, 700 MHz and 2,500 MHz, drew a blank.