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5G spectrum: Trai to review auction payment terms

Trai will also decide if operators need to pay any upfront amount — a portion of total bid amount — or the same would be waived this time.

In 2019, the government had provided a two-year moratorium on such payments.
In 2019, the government had provided a two-year moratorium on such payments.

The Telecom Regulatory Authority of India (Trai) will decide whether operators would get a four-year moratorium or longer after upfront payment for fresh spectrum they acquire in the 5G auctions to be held later this year, or the two-year moratorium — which has been the past practice — would continue. Trai will also decide if operators need to pay any upfront amount — a portion of total bid amount — or the same would be waived this time. The government will go by its recommendations, sources said.

Another issue to be reviewed by Trai this time is the duration of payment of spectrum dues by way of deferred instalments. Sources said all these issues are up for review as in September last year, the government announced a revival package for telcos in which they provided a four-year moratorium on payment of spectrum dues. In the past after every auction, operators were required to pay a certain portion of the bid amount depending upon the spectrum bands and pay the remaining over 16 years in equal instalments.

The upfront payment has been in the range of 25%, 33% and 50% of the bid amount depending upon the bands.In 2019, the government had provided a two-year moratorium on such payments. So, the operators have got a six-year moratorium in all with the net present value intact.Officials said since the telecom relief package has been provided to the operators to tide over their financial crisis and be able to invest in network, it makes sense to extend such relief for any spectrum acquired by them in the 2022 auctions for 5G spectrum.

However, since Trai will be working on the reserve price for the auctions, it will also look into all such related issues.On their part, the operators have sought a moratorium of 5-6 years on fresh spectrum bought in auctions and a 20-24-year period after that to pay the full amount in instalments.

For instance, Bharti Airtel and Vodafone Idea have suggested no upfront payment with a moratorium of six years, while Reliance Jio has proposed a 10% upfront payment followed by a five-year moratorium. Vodafone Idea has suggested 20 annual instalments after the moratorium period, while Jio has demanded 25 instalments. Bharti Airtel has sought 24 instalments after the moratorium.

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