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COAI calls for spectrum auction delay

COAI calls for spectrum auction delay

The Cellular Operators Association of India (COAI) has expressed its preference for the country’s next round of spectrum auctions to be postponed to late 2018 or early 2019.

Basing its objections on significant amount of consolidation currently underway in India’s mobile market, COAI’s declaration puts it at odds with the Department of Telecommunications, which is pushing for auctions to be held in the second half of 2017.

COAI director general Rajan Mathews said: “The timing [for the auction] should be the latter part of 2018 and early part of 2019 once all the consolidation has been announced and locked down. Only after that would companies look at any additional spectrum needs after they put their networks together.”

In early March, India’s government announced that it intended to auction 5G spectrum in frequencies above 3GHz before the end of the year. It also stated that it would attempt to resell spectrum in seven bands that went unsold in October 2016’s mammoth auction, which was the largest ever held in India.

While it brought in $9.8 billion, 60% of the available spectrum was not acquired, including spectrum in the valuable 700MHz band. Operators were deterred by the reserve price which valued the airwaves at INR11.5 billion ($178 million) per MHz, and analysts have called for this price point to be slashed to rekindle operators’ interest. Last week, the DoT requested that the regulator TRAI propose reserve prices for 4G and 5G spectrum in at least seven frequency bands.

Since it began operations in September 2016, newcomer Reliance Jio has increased the already high competition within the Indian market via its free service offers. Operators have been obliged to slash data tariffs and the upset has precipitated several major mergers, with numbers two and three Vodafone India and Idea Cellular combining to form a new mobile market leader.

Meanwhile, current market leader Bharti Airtel is acquiring the Indian unit of Telenor, increasing its market share to around 30%. Smaller rivals Reliance Communications (RCom) and Tata Teleservices are also discussing a merger.

COAI has said that it will officially recommend delaying the auctions and setting a lower reserve price for 700MHz spectrum when the auction consultation process gets underway.

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