CHENNAI: The Cellular Operators Association of India (COAI) has asked the government not to hold any spectrum auction till the market stabilises. “The industry needs some time to settle before being able to spend on spectrum at another auction. There will be a need for more spectrum soon, but even if the exchequer re-auctions spectrum to earn revenues, the industry cannot afford to bid for any more spectrum before the latter part of 2018 or early 2019,” Rajan Mathews, director-general of COAI, told Express.
Flagging the industry’s financial constraints, Mathews said telcos are in the midst of expanding 4G services while consolidation in the industry has also entered the final phase. “We hope that by early 2019 all the consolidation would be concluded and the industry would be in a better position to spend on additional spectrum.”
Noting that there had been no takers for the 700 MHz band in the 2016 auctions, Mathews said, “The reverse price of 700MHz band needs to be revisited after carrying out a bottom-up evaluation -- which would analyse the market conditions, revenue opportunities and market demand and supply.”
The telcos, however, indicates that the value of this band should be kept equal or lower than the price of 800 MHz band spectrum this time around. As of now, the operators in India hold 4345 MHz of spectrum across six bands.
The DoT had put 2,354.55 MHz of spectrum for auction in 2016 across seven bands at a cumulative base price of `5.6 lakh crore, of which bids worth `65,789 crore were received for 964.8 MHz spectrum.
In September, an inter-ministerial group looking into the telecom sector’s financial health also suggested the next spectrum auction not be held this fiscal, but only in FY19 after 20 units of 4G spectrum in the 2300
MHz band become available. The next round of auction would see 5G airwaves making their debut.
According to experts, at a time when there are talks to provide some incentives to the ailing industry, a mega spectrum auction definitely appears counter-intuitive. It may also be noted that Reliance Jio is arguably one of the frontrunners in the sale of spectrum which RCom intends to undertake to stay away from the consortium of 35 lenders from assuming control over the firm as part of debt reduction.