5G Spectrum Auction: TRAI Unlikely to Revise Spectrum Base Price

TRAI may not change the existing reserve price of spectrum in the mid-band earmarked for 5G, a highly-placed source said. This move might translate again in low turnout at the imminent 5G Spectrum Auction.

5G Spectrum Auction to be a Dull Affair?

A source said, "we are unlikely to revisit our pricing and stand that we have already taken earlier, but may consider newer bands such as the millimeter wave (mmWave) band with a reasonable price to drive economic benefits".

TRAI might put at least 1 GHz of spectrum on sale, allowing telcos to drive countrywide 5G deployment. The sector regulator has already been busy conducting in-house studies to arrive at a suitable base price and quantum for the spectrum.

Telcos led by COAI have been asking the DoT to seek reserve prices from TRAI for multiple frequencies. These bands, being used for field 5G trials, including mmWave band, will form the core of the network.

It looks like at least the industry's demand of a larger chunk of spectrum will be fulfilled. The industry has been targeting offering enterprise solutions around IoT, AI, VR and Industry 4.0 applications.

What Now for India's 5G Rollout?

Telcos, particularly Bharti Airtel and Vodafone Idea, have been demanding a cut in the base price of 3.3-3.6 GHz band which was set up at ₹492 Crore/MHz by TRAI in 2018. What's more, the DoT had said that the unsold 700 MHz spectrum will once again on sale in the 5G spectrum auction, along with the earmarked band.

However, in March this year, the coveted 700 MHz spectrum band did not find any buyer; at ₹6,568 crore per unit, the band still remains a pipe dream for the telcos. No telcos bought the band in the March spectrum auction; Bharti Airtel said that the band had no economic case for operators. Also, Reliance Jio and Vodafone Idea remained wary during the sale.

TRAI, however, believes that the price is justified and that the band remained untested. In 2019, it had stopped the DoT move to cut 5G airwaves pricing. It said, "the authority reiterates the spectrum valuation and reserve prices as contained in its recommendations dated 1st August 2018."

Interestingly, DoT has allocated spectrum in not only the mid-band, but the 700 MHz and mmWave band too. The DoT wants the telcos to develop India-relevant use cases for this band. The telcos had also called this a moot point, since there were no guarantees that the government will make these bands available.

The situation remains unclear, though. If the government sticks to its pricing point, 5G will not only come later to India, but also at a much higher price. Without a proper spectrum portfolio, telcos can't deploy affordable and nationwide 5G.