With the Centre set to accept the revised base price for 5G spectrum, telecom operators such as Bharti Airtel, Reliance Jio and Vodafone Idea are planning to send a representation to the government seeking a review of the price. The Digital Communications Commission (DCC) has reportedly approved the reserve price suggested by regulator Trai.
Sources said the operators will seek a review once the DoT formally announces the DCC decision.
The regulator has recommended a mega auction plan of over Rs 7.5 lakh crore for over 1 lakh megahertz spectrum if the government allocates the spectrum for a period of 30 years. In case of 20 years, the total value of the proposed spectrum auction will stand at around Rs 5.07 lakh crore at the reserve price, according to back-of-the-envelope calculation.
With large swathes of spectrum remaining unsold in the last two auctions, Trai has recommended to the government to sell airwaves in all existing bands of 700MHz, 800 MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz and new slots of 600MHz, 3300-3670MHz and 24.25-28.5GHz. It has suggested about 39 per cent lower reserve price for all bands compared with the prices proposed in the its previous recommendation in 2018.
The DCC, the highest decision making body of the department of telecommunications (DoT), at its meeting on April 29, has decided the prices recommended by Trai did not need any downward revision.
It said the operators be given the choice of either buying spectrum for 20 years or 30 years. The Centre will have to change its rules because as per the latest policy, the government has to offer spectrum on a 30-year lease instead of the previously prevalent 20 years.
Telcos said with a 36 per cent cut in reserve price of 5G spectrum in the 3,300-3,670MHz band 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 to get the spectrum for 30 years, the operators will have to pay Rs 47,550 crore, which is not much lower than the earlier price. Industry body COAI said “despite the government’s decision to allocate 5G spectrum for a period of 30 years, the Trai has decided to recommend reserve prices for 20 years and applied 1.5 times multiple to the price if spectrum is to be taken for 30 years.”
“If one were to look at the pan-India price of 3.5GHz spectrum, we are back to square one with effectively no change and will nullify the relief provided by union cabinet in the year 2021,” the COAI said.