Regulation

Will TRAI's recommendations influence India’s spectrum auctions?

Will TRAI's recommendations influence India’s spectrum auctions?

The Telecom Regulatory Authority of India (TRAI) has made a number of recommendations relating to the next auction of spectrum in India. But will they be accepted?

Earlier this week, TRAI publicised a large number of suggestions, apparently based on comments received from stakeholders during a consultation process, and its own further analysis, the most significant of which included the auctioning of the entire available spectrum in the upcoming sale – that is, spectrum in the 600MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300MHz, and 26GHz frequency bands.

That’s about 11,790MHz of spectrum, valued at about INR2.1 trillion (US$23.1 billion), more than 2022’s US$17 billion, but a lot more than the 2024 sale that raised only US$1.30 billion when Reliance Jio emerged as the sole bidder for the 700MHz spectrum.

Among its many other recommendations, TRAI suggested lower entry barriers for new entrants (including reduced net-worth requirements in some areas) and spectrum caps to safeguard competition – though this would not apply to any telecom carrier that has already acquired spectrum that exceeds the cap. 

After the 2022 auction, the 600MHz range reportedly contributes to nearly 62% of the overall spectrum availability with a reduced base price of up to 17%. TRAI suggested that while the spectrum charge on 600MHz may be levied for a period of 20 years, the validity period of the spectrum should be increased by four years to 24 years and that there should be no rollout obligations for the initial four years. Some commentators have suggested that this may have something to do with device availability.

TRAI also advocated reserving the 6GHz (upper) band for mobile telephony services and added that the available airwaves bands in the 6425-6725MHz and 7025-7125MHz should not be put up for sale until after the WRC-27, the ITU World Radiocommunication Conference, at which a number of decisions regarding spectrum usage worldwide will be made.

TRAI pointed out that a number of former Indian operators are dealing with insolvency and said that any spectrum they hold should be made available for the forthcoming spectrum auction. It also proposed a reduction of up to 10% in the spectrum cost from the auction-determined price for all licensed service areas (LSA) across frequency bands. LSAs include remote, rural or underdeveloped regions.

The bottom line, across the entire auction, is that spectrum could be close to 20% cheaper than prices recommended in 2022.

According to the Economic Times news service, the Union Minister of Communications Jyotiraditya Scindia has said that the Department of Telecommunications (DoT) would take a call on the spectrum auction following a review of the regulator's recommendations – of which there are many more on TRAI’s website. The DoT will announce the actual dates for the live auction in the coming months.

Spectrum auctions worldwide are apparently attracting less interest recently. There has also been a perception that Indian prices have been too high in recent auctions. If TRAI’s recommendations are accepted does this mean pressure to get the spectrum sold could outweigh the – possibly unrealistic – desire to get a good price?



More Articles you may be Interested in...