Spectrum auctions: Trai to take up pricing, payment norms for review

It has additionally requested how ought to give up of spectrum by operators be given form.

The Telecom Regulatory Authority of India (Trai) on Tuesday hinted that the methodology of valuation of spectrum and thereafter fixing the reserve worth for auctions could also be revised from what has been adopted to this point.

Additional, parts like upfront fee to be made by the operators for spectrum acquired in auctions, the moratorium interval, the variety of installments for deferred fee, and spectrum cap can also be reviewed. Areas like block measurement, spectrum give up and spectrum task for personal networks can also be analysed in a recent perspective.

Trai has flagged all these points on Tuesday in its session paper, which is aimed toward fixing the reserve worth of spectrum unfold throughout 10 bands, together with 600 MHz and the millimetre band for 5G providers. Within the course of, the quantum of spectrum which can be put up for auctions subsequent 12 months can be the biggest to this point and if the reserve worth just isn’t fastened realistically, the federal government runs the chance of as soon as once more discovering no takers for a considerable amount of airwaves, which was the case within the auctions held in March this 12 months and earlier in 2016.

Stakeholders are required to submit their responses on varied points by December 28 and the deadline for counter-comments is January 11.

On valuation and pricing, Trai has quoted DoT’s communication, which reads, “There’s a have to strike stability between income era from the public sale on one hand, long-term progress/sustainability of the telecom sector, introduction of recent providers/applied sciences, on the opposite. Within the recently-concluded spectrum public sale 2021, solely 37.1% of spectrum put up for public sale was acquired by the telecom service suppliers.”

The communication additional states, “The federal government has not too long ago permitted for an possibility of four-year moratorium on spectrum public sale instalments in addition to AGR instalments for TSPs, to make sure wholesome money circulate state of affairs within the sector. Additional, spectrum mendacity idle is a waste for the economic system.”

The regulator has sought the views of the stakeholders on why giant quantum of spectrum remained unsold within the earlier auctions. It has additionally requested whether or not the reserve worth ought to proceed to be at 80% of the valuation or needs to be modified. Although lastly decreasing the reserve worth can be a problem for the Trai in addition to the federal government, however the trade feels that by elevating such questions and making an attempt to analyse them with stakeholders’ inputs signifies that the train can be significant and yield desired outcomes.

Mentioning the latest authorities’s revival bundle for the telecom sector which included rationalisation of financial institution ensures, enhance in period of spectrum allocation to 30 years from the present 20, provision for give up of spectrum, no spectrum utilization prices for spectrum acquired in future auctions, and elimination of further spectrum utilization cost of 0.5% for spectrum sharing, Trai has sought to know from the stakeholders how would these measures affect the pricing of spectrum.

Trai has requested what share of bid quantity needs to be fastened as upfront fee in every spectrum band, what needs to be the relevant interval of moratorium for deferred fee possibility, and what number of instalments needs to be fastened to recuperate the deferred fee. Within the March 2021 public sale, telecom operators needed to make an upfront fee amounting to 25% of the bid quantity for sub-1GHz bands and 50% for above 1GHz bands. The deferred funds should be remodeled a interval of 18 years (2 12 months moratorium plus 16 annual installments) with rate of interest of seven.3%.

Since 5G would herald the period of personal networks, the Trai has requested whether or not the licensing framework must be modified when bandwidth is used for functions aside from offering direct providers to customers. “They can be utilized by industries to automate manufacturing traces, to cut back safety dangers, to guard staff from harmful environments, monitoring and management of belongings and so forth,” Trai has mentioned. A few of the questions which have been raised embody whether or not operators needs to be allowed to lease spectrum for such functions and what needs to be the caps, blocks of airwaves leased, SUC and different regulatory obligations.

The regulator has additionally requested whether or not the present spectrum caps needs to be modified. As an example, no operator can presently maintain greater than 50% of sub-1 GHz spectrum in a circle. It has additionally requested how ought to give up of spectrum by operators be given form.