DCC Approves 5G Spectrum Auction Plan; To Be Held In March-April 2020

Despite the fact that the telecom sector is not ready for the 5G spectrum auction, Digital Communications Commission has approved the sale of the spectrum in March -April 2020. The highest decision-making body DOT has allowed the sale of 8300 MHz of spectrum in all circles.

"The DCC has approved the recommendation of the Telecom Regulatory Authority of India. We are hopeful that auction shall be conducted in March-April," telecom secretary Anshu Prakash was quoted by the Economic Times.

However, all telcos and analysts earlier intimated that the base price of the spectrum is too high. -, TRAI has fixed Rs. 492 crore per unit for 3,300 and 3,600 Mhz band, (which is 5G). The regulator has suggested Rs. 6,568 crore per MHz for the 700 MHz bands, (which is used for 4G).

This new development comes at that time when both Airtel and Vodafone- Idea are facing a major financial crisis, due to AGR provisioning, predatory pricing, and loss in Q2 results. But still, analysts believe that all private telecom players will go for the 4G spectrum again, as the given spectrum in some circles is going to expire in 2021. Besides, there are chances that no one will buy a 5G spectrum during the upcoming auction, due to high pricing.

Similarly, COAI, DG Rajan S Mathew, said that "The DCC's decision to proceed with spectrum auctions in the near future may be forthwith challenging. With spectrum reserve prices 4 to 6 times higher than that of a similar spectrum sold recently in several countries, high levels of debt and prevailing financial stress in the sector, telecom service providers will find it very difficult to raise funds to participate in the auctions. "

Furthermore, he suggested that the sector should regain some financial strength from the initiatives taken by the government. Notably, this is not the first time COAI has raised its voice against spectrum auction.