NEW DELHI: Despite repeated protests from industry players, the Digital Communications Commission (DCC) on Friday approved the spectrum prices recommended by the Telecom Regulatory Authority of India (TRAI) for the upcoming spectrum auction.
The decision has been met with bleak reactions from the industry, with the Cellular Operators Association of India (COAI) stating that telcos will find it "very difficult" to participate in the auctions due to the high base prices - 4-6 times costlier than global standards.
The DCC’s decision comes after months of see-saw deliberations between TRAI and the DCC, with industry representations stating that the prices recommended are "extremely" high.
According to telecom secretary Anshu Prakash, the Rs 5.22 lakh crore spectrum auction for the sale of 8,300 MHz of airwaves across 22 circles is likely to take place in March-April next year.
"We are hopeful of healthy participation as demand for data is growing. Telecom operators need spectrum to further expand their network," Prakash said.
Earlier this month, Telecom Minister Ravi Shankar Prasad had informed the Parliament that 275 MHz of radio waves with frequencies between 3,300-3,400 MHz and 3,425-3,600 MHz band will be available for 5G auction.
However, industry reactions indicate that the auction may sell turn out to be a flop show. "With spectrum reserve prices 4 to 6 times higher than that of similar spectrum sold recently in several countries, high levels of debt and prevailing financial stress in the sector, telecom service providers will find it very difficult to raise funds to participate in the auctions," said COAI director general Rajan Mathews.
Major telcos, already struggling with sharp falls in earnings and low prices, are facing a Rs 1.47 lakh crore demand from the Department of Telecom arising from the SC’s AGR verdict.
Analysts have noted that this place significant stress on the already burdened sector and may even lead to Vodafone Idea exiting the market.
"Further, the quantum of spectrum in the 5G band being put up for auction will be only 175 MHz, woefully inadequate for operators to roll out robust 5G networks and services," Mathews said, adding that it would be "prudent to let the sector regain some financial strength from the recent initiatives undertaken before scheduling the auction."
"The interim period can be used to design and test India specific 5G use cases," he said.
While TRAI had initially recommended that radiowaves going for auction be valued at Rs 4.9 lakh crore, the DoT has now included additional spectrum to be auctioned - freed up by the expiration of licences of Reliance Communications, Bharti Airtel and Vodafone Idea in select circles.