The Union Cabinet has approved a proposal for the auction of 2,251.25 MHz of spectrum worth Rs 3.92 trillion at the base price. The spectrum auction is expected to be held by March 2021. To this end, the telecom ministry is planning to issue a notice to invite bids in December 2020.
Spectrum in seven frequency bands ranging from 700 MHz to 2500 MHz will be offered to the telcos for a validity period of 20 years. The government, however, has decided not to auction frequencies in 3,300-3,600 MHz bands that were identified for 5G services.
According to industry analysts, the sale of the said spectrum can potentially generate around Rs 400 billion to Rs 500 billion. Further, analysts have highlighted that most of the 700 MHz band, which is best suited for 4G and 5G, will likely go unsold at the current rates. This despite the fact that the current prices are 43 per cent lower than prices in the 2016 sale, when it went completely unsold.
Commenting on the government’s decision, Lt Gen Dr SP Kochhar, director general, COAI, said, “We welcome the government’s decision to auction spectrum by March 2021. This will enable the industry to cater to the exponential increase data usage and continue supporting the Digital India vision. While the Government has addressed the requirement for more spectrum, lower reserve prices would have provided additional resources for network expansion to the telcos. High reserve prices in past auctions have resulted in large amounts of spectrum remaining unsold. We hope the Govt. will take additional measures to boost the financial health of the industry, which is the backbone of a digitally connected India.”
