Top DoT body accepts Trai’s 5G base price suggestions

The highest decision-making body of the Department of Telecommunications accepted the telecom regulator’s recommendations on base prices of 5G airwaves on Friday, while deciding that spectrum should be auctioned for a period of 20 years, said officials.

The move dealt a blow to the telecom operators, who have been seeking a steep reduction in the floor price as well as a 30-year tenure for bandwidth use.

The Digital Communications Commission (DCC), an inter-ministerial panel with the telecom secretary as its chairman, also decided not to allot spectrum directly to corporate entities for private 5G networks – as suggested by the regulator – but instead that they partner with licensed telcos, accepting a key demand of the operators.

The regulator’s proposal was bitterly contested by telcos, who said it would kill the business case for 5G spectrum as it would dent revenue from enterprises.

At its meeting, the DCC also decided that airwaves in the millimetre wave band of 27.5 GHz to 28.5 GHz band – which was sought by satellite companies for broadband-from-space services – should be kept out of the 5G spectrum auction. The regulator had suggested that telcos and satcom companies use the band on a “coexistence basis”. The panel also decided to reserve some 5G bandwidth for state-run carrier Bharat Sanchar Nigam Ltd.

The DCC’s recommendations, which were in line with the recommendations of the DoT’s standing committee, will now be sent to the Cabinet for final approval.

ET first reported the standing committee’s recommendations to the DCC on its online platforms at 10.20 am on Friday.

‘Developed Country Rates Studied’

The government plans to auction more than 100,000 MHz of airwaves valued at about Rs 5 lakh crore in June and wants initial rollouts of 5G services by August-September.

“The DoT (standing) committee studied the pricing of spectrum across various developed countries and in terms of purchasing power parity. This is largely comparable to the price per MHz of spectrum per capita population in developed countries. It could be slightly higher but the committee found it to be okay,” said a senior official, who did not wish to be identified.

The Telecom Regulatory Authority of India (Trai) had on April 11 recommended a base price of Rs 317 crore a unit for airwaves in the premium 3.3-3.67 GHz band (C-band), a 36% reduction to its last recommendation in 2018. It also cut the recommended price for the coveted 700 MHz spectrum by 40%, to Rs3,297 crore a MHz, in a bid to spur India’s mobile phone companies to bid aggressively in the upcoming 5G airwaves sale.

At these prices, on a per capita basis, the 5G prices for the 3.3-3.67 GHz band airwave band work out at about $0.03 per MHz, among the lowest in the world, as per CLSA. The price is the highest globally when taken on a per MHz basis, though, according to the investment group.

Prashant Singhal, global TMT emerging markets leader at EY, told ET that the reserve prices of 5G airwaves “remain very high compared to all international benchmarks, and accordingly, bidding for C-band 5G spectrum (3.3-3.67 GHz) in the upcoming auction is likely to be both limited and lukewarm, and may be confined to just the metros and tier-A markets where 5G adoption levels would be faster”.