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DCC clears Rs 5.22L cr spectrum sale plan; auction in March-April

DCC clears Rs 5.22L cr spectrum sale plan; auction in March-April
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New Delhi: The Digital Communications Commission, the apex decision-making body at the telecom department, on Friday approved a Rs 5.22 lakh crore spectrum auction plan entailing 8300 MHz of airwaves across 22 circles and the sale is likely to take place in March-April.

"The DCC has today approved the recommendation of Telecom Regulatory Authority of India (TRAI). We are hopeful that auction shall be conducted in March-April," Telecom Secretary Anshu Prakash told reporters here.

He said the auction will entail sale of over 8300 MHz of spectrum spread over all 22 telecom circles, the reserve price of which comes to Rs 5,22,850 crore.

The government did not reduce price of spectrum despite request from telecom operators.

"We are hopeful of healthy participation as demand for data is growing. Telecom operators need spectrum to further expand their network," Prakash said.

However, industry body COAI Director General Rajan S Mathews said he does not see stressed balance sheet of telecom operators to give them appetite to bid for spectrum, especially for 5G services.

"The quantum of 5G spectrum is too less and price is too high. I don't feel that stressed balance sheet of telecom operators will allow them to bid for this spectrum. If it has been put in auction to see the response of the market and reduce price later, then it helps like it happened in case of 700 MHz band," Mathews said.

Telecom Minister Ravi Shankar Prasad had informed Parliament that 275 MHz of radiowaves frequency between 3,300-3,400 MHz and 3,425-3,600 MHz band is available for 5G auction.

The COAI said with spectrum reserve prices 4-6 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.

TRAI had initially given recommendation for radiowaves valued at Rs 4.9 lakh crore. However, the telecom department has also included additional spectrum for the auction which will be free from expiration of licences of Reliance Communications, Bharti Airtel in 8 circles and Vodafone and Idea Cellular in 4 circles each.

Successful bidders will have to pay 25 per cent of the amount upfront for sub 1 GHz, and 50 per cent upfront for higher frequency bands.

Installment will be spread over a period of 16 years. There will be a two-year moratorium for payment after the upfront amount is given. This means that installment will have to be paid from third year, in 16 annual installments.

Successful bidders will be required to make only 10 per cent upfront payment for sub-1 GHz band and 20 per cent for above 1 GHz band for the set of spectrum that will not be available after 6 or 12 months and balance before 1 month of their availability.

"Telecom operators will have to make upfront payment of 25 and 50 per cent only for spectrum that will be available within a month from the auction," Prakash said.

Based on views sought by the government, TRAI on August 1, 2018 had recommended auction of spectrum in the 700MHz, 800MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz, 3400-3600MHz bands. Meanwhile, the DCC at its meeting on Friday, also approved submarine fibre cable connectivity between Kochi and Lakshadweep island, and under the plan 11 islands will be connected.

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