Reliance Jio seeks early spectrum auction, says policy pause to hurt national exchequer

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September 29, 2020 7:29 PM

Mukesh Ambani-led Jio in a letter dated September 28 to Telecom Secretary Anshu Prakash said that the nation-building policies should not be kept hostage to the vested interest of few operators and delay in auction is hurting the national exchequer.

According to Jio, spectrum worth Rs 3.92 lakh crore is lying unused with the DoT for auction.

 

Telecom major Reliance Jio has questioned the Department of Telecom’s rationale to pause the policy of annual spectrum auction and demanded that the sale of airwaves should be held at the earliest to meet the demand for data services in the country. Mukesh Ambani-led Jio in a letter dated September 28 to Telecom Secretary Anshu Prakash said that the nation-building policies should not be kept hostage to the vested interest of few operators and delay in auction is hurting the national exchequer as well as making investors jittery as perceived against the principle of ease of doing business.

The telecom major said that any delay in auction of unutilised spectrum will lead to serious issues around quality of mobile services in terms of call drops etc and also result in “revenue loss to the government.” “We are unable to find any reasonable rationale behind this sudden pause in a successful and fruitful policy of auctioning all available spectrum every year, since the Hon’ble Supreme Court decision in 2012,” Reliance Jio said in the letter.

The spectrum auctions were held every year after the apex court order in the 2G case in 2012 and the last was held in 2016. “In order for sustainable and orderly growth of the sector, to meet the national objectives and for provision of quality broadband for all, allocating sufficient spectrum is imperative. Therefore, we reiterate that all available spectrum should be immediately auctioned,” the letter said.

The Digital Communications Commission, the apex decision making body of the Department of Telecom, in May approved the spectrum auction plan subject to Union cabinet approval. The DoT, however, is yet to come up with any notification for the next round of auction in which airwaves worth Rs 5.22 lakh crore are to be sold.

According to Jio, spectrum worth Rs 3.92 lakh crore is lying unused with the DoT for auction.

The telecom ministry gets an average revenue share of around 5 per cent as spectrum usage charge from telecom operators which is calculated based on their spectrum holding of companies and 8 per cent as licence fee from the revenue earned by the companies from sale of communication services.

Jio said in the last four years, since the last auction, there has been an exponential increase in traffic and data consumption by almost 50 times with 3.5 times rise in mobile broadband users. “We understand that a few service providers might be opposing spectrum auctions to stifle competition as they have amassed large amounts of spectrum through mergers and acquisitions and they are also losing customers every month,” Jio said.

According to the Trai recommendation and government decision in 2012, spectrum auction should be held 18 months before the expiry on any licence or right to use spectrum. Around 39 licences issued by the government in 2001 are set to expire in about eight months between July to September 2021.

Jio said any delay in auction not only deprives the government of revenues from unutilised resources but also against the Supreme Court’s order of 2012. “We further submit that the delay in auctions will keep huge amounts of spectrum vacant with the government, generating no revenue, hurting the national exchequer and economy in such precarious economic times,” the letter said.

According to Jio, immediate auction can generate around Rs 25,000 crore upfront before December 2020. The last four spectrum auctions have fetched bids worth Rs 2.5 lakh crore to the government. The auction held in 2015 alone realised Rs 1.09 lakh crore in revenue for the government.

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