TRAI Cuts 5G Spectrum Price By 36-40%

The telecom regulatory on Monday has suggested a 36% cut in the 5G Spectrum (3300-3670MHz band) to Rs. 317 crore across India from the Rs. 492 crore suggested in 2018. It offers significant relief to telcos and sets the stage for them to secure prized airwaves in the government auction. 

Not only this, TRAI, Telecom Regulatory Authority of India, has also suggested a reduction in the reserve prices in the 700MHz band, where the prices have been cut by 58-45% in the major circle of Mumbai and Delhi, at Rs. 470 crore and Rs 500 crore, respectively. 

The base price on Pan-India now comes to Rs. 3,927 crore per MHz, a 40% lower than the prices recommended by the government in 2018. Moreover, the base price for the 600MHz band, the new band, and 700MHz could compete with the country’s top three carriers, Reliance Jio, Bharti Airtel and Vodafone Idea (VI), if they opt for the bands in the upcoming spectrum auctions.

The government plans to hold the auction by May-June and will have to approve all TRAI suggestions before processing the Spectrum sale. However, according to the analyst, the cuts were inadequate and the service providers in the auction may not fully pick the airwaves. 

“The reduction is not enough, especially in 3300-3670MHz. The Spectrum price in India is very high compared to global benchmarks, but the revenue from the capital deployed in the spectrum bands is lower than in other countries. India’s Telecom’s services revenue is 60% of Germany’s, 70% of UK and 90% of South Korea”, said Prashant Singhal, Global TMT emerging market leader at EY. 

Whereas some industry specialists take it as a positive sign. 

“This will enable the service provider to spend additional CapEx and launch new age services and business models”, said Ankit Agarwal, Managing Director at Sterlite Technologies.

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