TRAI recommends a cross-band reduction in frequency prices by up to 40%

To ease the telecoms sector, the telecoms regulator of India (TRAI) on Monday slashed the base price of ether by up to 40% across all frequency bands, including 5G ether.

The telecoms regulator has also proposed that all available spectrum in the existing bands – 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz – along with radio waves in new bands such as 600MHz, 3300- 3670MHz and 24.25-28.5GHz.

In a letter to TRAI last November, the DoT had emphasized the need to strike a balance between revenue generation and the sustainability of the telecom sector, so that telecom providers are healthy and have sufficient capacity to operate regularly and with significant investments for the transition to 5G technology. It had also highlighted that only 37.1% of the spectrum auctioned off in the previous auction was purchased by telecom companies and that unused spectrum was a waste for the economy.

“The contributions received from the authority during the consultation process also point to the need for further rationalization of the floor price,” the regulator said in the more than 400-page recommendation.

The regulator has recommended reducing the reserve price for all frequency bands by up to 40% for a period of 20 years compared to the base price proposed in its previous recommendations. For 5G radio waves in the 3300-3670MHz band, the reserve price for all of India is ₹3.17 billion/MHz, which is 35.5% lower than ₹4.92 billion/MHz previously recommended. Similarly, the reserve price for the 700MHz premium band, which had no bids in the previous auction, was reduced by 40% from around £6,568bn/MHz to £3,927bn/MHz.

At the most recent auctions in March 2021, a total of 2,308.80MHz of spectrum valued at ₹4,00,396.20 crore was auctioned at reserve price, of which 855.60MHz of Quantum was sold, resulting in a total of winning bids valued at ₹77,820.81 crore led. No bids were received in the 700 MHz and 2500 MHz bands.

The regulator has also proposed that the reserve price for spectrum allocation in the case of 30 years should be 1.5 times the reserve price for spectrum allocation for 20 years for the respective band. “For the long-term growth and sustainability of the telecom sector, providing liquidity and encouraging investment, telecom providers should be allowed easy payment options, including installment payments with the flexibility of a moratorium,” she added.

It also said that to facilitate doing business, simple and transparent policies were recommended for returning spectrum with a spectrum handover fee of 1 lakh per band and LSA.

It has also suggested that for the rollout of 5G use cases in different industries, a 5G-specific inter-ministerial working group (IMWG) should be formed, chaired by a member (Technology), DoT, representing the Department of Electronics and Information Technology, Department of Promotion of Industry and Internal Trade, Ministry of Information and Broadcasting, Department of Space, Ministry of Finance, Ministry of Education, Department of Science & Technology, Ministry of Micro, Small and Medium Enterprises (MSME) and NITI Ayog as members who should by JS level officers will be represented.

The government intends to hold spectrum auctions in 2022 to allow private actors to roll out 5G services before March 2023.

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