Trai seeks views on sale of 5G services spectrum, other bands

New Delhi: Regulator Trai on Monday started consultation process for the next round of spectrum auction that includes radiowaves for 5G services and frequencies such as the prized 700 MHz that had no takers in the previous auction.

The consultation paper follows reference from the Department of Telecom (DoT) in April this year where the department sought views of the regulator on various conditions for the auction, including valuation and reserve price for mobile airwaves across nine different frequency bands.

While DoT has proposed to hold auction in 2017, the Telecom Regulatory Authority of India (Trai) has sought opinion on when the next round of auction should be held and whether it should be done in a "phased manner", given the financial stress on telecom operators.

"The government is planning to auction the right to use of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz and 3400-3600 MHz bands in the next auction to be held in 2017," Trai said in the consultation paper.

"DoT has requested the Authority to provide its recommendations on applicable reserve price, quantum of spectrum to be auctioned and associated conditions for auction of spectrum in these bands for all service areas," it said.

Industry association COAI suggested that the government should not rush to auction spectrum this year, as the industry is going through "acute financial crisis" and "uncertainties".

COAI further said 2019 might be an "appropriate" time to auction 5G spectrum as there will be better use cases and applications for it, and its ecosystem would be developed.

In all, the consultation process entails auction of roughly 7500 MHz of spectrum across nine bands (compared to 2,354.55 MHz that was placed on the block in the previous auction), according to two Trai officials.

This is the highest quantum of radiowaves frequencies ever sold through auction in the country and includes 60 per cent of the total spectrum that remained unsold in the October 2016 auction.

In addition, DoT has included 275 Mhz of radio frequencies in two more bands for mobile services -- 3300-3400 MHz and 3400-3600 MHz -- that can be used for 5G services.

During the previous bidding in October last, the government had put airwaves worth Rs 5.66 lakh crore for sale. In the five-day auction, seven telecom companies made commitments of Rs 65,789 crore for buying 964.80 MHz of spectrum in various frequency bands.

Even at the end of the auction, nearly 60 per cent of the spectrum remained unsold and spectrum worth Rs 4 lakh crore in 700 Mhz band found no takers.

The telecom industry has been reeling under poor financial health, falling revenue and profitability and is staring at Rs 4.5 lakh crore of debt. Industry body COAI has said appetite for spectrum is likely to be felt only by late next year or early 2019 as telecom operators are taking stock of their holdings amid ongoing consolidation.

COAI Director General Rajan Mathews told PTI that having a clear road map for spectrum auction is important, but the larger question is around when the auctions will actually happen and how the entire strategy syncs with the new telecom policy being drafted by DoT.

Also, Mathews felt that the value of the 700 MHz band should be based on analysis of the market and not pegged to the previous auction amount for 800 MHz and 900 MHz bands.

In all, Trai has asked 19 questions ranging from suitable timing for the auction to block sizes, from rollout obligations (for old and new bands) to spectrum caps, and valuation approach for arriving at a suitable reserve price for various bands. Last date for comments is September 25 and that of counter-comments is October 3.