Editorial – January 2021

Spectrum auctions in seven bands – 700, 800, 900, 1800, 2100, 2300, and 2500 MHz – are slated for March 1, 2021. A total of 1,914 MHz spectrum across bands is on sale. This spectrum is worth over Rs 4 lakh crore with an average price of Rs 209 crore per MHz (paired). On expected lines, three telcos – Reliance Jio, Bharti Airtel and Vodafone Idea – are participating in the auction process. Spectrum on auction is technology neutral and is 5G capable, it can be used for providing 5G services by giving six months’ notice to DoT.

It is not known when spectrum in the 3,300-3,600 MHz band will be auctioned for 5G services. Trai’s recommended base price is too high, at Rs 492 crore per MHz, and needs to be slashed and be compatible with financial realities of the sector.

Certain technology companies are lobbying for delicensing and trying to pass it off as public motivation by saying that they will provide cheaper broadband services. These are hoodwinking strategies. The target is to grab free spectrum. This is unfair, unjust and will totally disturb the level playing field. For commercial services like Public Data Office, which will ride on WiFi V6, the specifications are the same as 5G services. The value of E&V bands, for which the delicensing clamor is raised, is in the range of Rs 2.60 lakh crore to Rs 6.50 lakh crore. Cheap data is market logic, the spread of 4G services has shown this, for this spectrum needn’t be given free. It cannot be given free.

Spectrum must be auctioned, there can be no circumvention; there are Supreme Court judgements to this effect, policy wisdom also reinforces this. Addition to government coffers must be made through auction of natural resources. However, the reserve price has to be aligned realistically to the prevalent market situation. DoT also needs to get its act together on timing and not let unutilized / unsold spectrum languish for years.

The March 2021 auction is happening after a big gap. The last auction was held in October 2016, it did not see a very good response and unsold stocks remained. This year too, the three operators combined will buy spectrum worth Rs 40,000 crore only and the government will get Rs 15,000-20,000 crore in the current fiscal since payments from operators are calibrated over a period of time. Read our comprehensive cover story on Spectrum in two parts for more details on all dimensions.