In this round, the DoT is stated to be opposed to quick administrative allotment of spectrum for private 5G networks.
According to various sources, the telecom department is aiming for a 20-year validity for spectrum that will be auctioned off in the near future. According to PTI’s sources, the Department of Telecom (DoT) is recommending TRAI-recommended reserve pricing to the Cabinet, which will eventually make a decision on these critical 5G spectrum auction concerns.
The sources claimed the DoT is not in favour of a rapid administrative distribution of spectrum for private 5G networks in this round, citing the thorny issue of captive networks, which has seen telcos and tech firms embroiled in a war.
They pointed out that the industry regulator, TRAI, had said that extensive studies (to determine demand and market) for captive networks will be conducted.
According to insiders, doing such investigations would take more time.
The TRAI has also made no recommendations on methods or rates for any such administrative allocation, according to the sources, who added that the Cabinet will make the ultimate decision on all of these issues.
According to insiders, the telecom department favours a 20-year validity for spectrum put up for auction because the regulator TRAI worked out its reserve price estimates on a 20-year basis. The Telecom Regulatory Authority of India (TRAI) recommended in its 5G recommendations in April that the reserve price of spectrum allocation for 30 years should be 1.5 times the reserve price of spectrum allocation for 20 years for the appropriate band.
According to the sources, while TRAI has proposed a ‘1.5 times’ methodology to compute the base price for 30 years of validity, this might increase interest outgo and instalments for players, contradicting the spirit of the reforms, which aimed to decrease the burden on telecom businesses.
The mega auction was originally scheduled for June, but due to the Cabinet’s failure to accept the 5G spectrum auction’s modalities, that date is now likely to be pushed back.
At its meeting on June 8, it was generally expected that the Cabinet will make a decision on spectrum pricing for 5G auctions and associated modalities (Wednesday).
According to the sources, the DoT is optimistic that the topic will be discussed next week.
The Telecom Regulatory Authority of India (TRAI) recommended a 39% drop in the reserve or floor price for the sale of spectrum for mobile services, including 5G, although the sector has criticised the regulator’s spectrum prices as “extremely expensive.”
The Cellular Operators’ Association of India (COAI) claims that the industry requested 90% lower rates, and that the industry’s recommendation of merely a 35-40% drop in spectrum pricing is “extremely disappointing.”
Meanwhile, ahead of the spectrum auction for next-generation services, a verbal battle has begun between telcos and internet giants over the controversial subject of captive networks.
While the Broadband India Forum (BIF) has advocated for the direct allocation of spectrum for private 5G networks to businesses for a nominal administrative fee, mobile operators have argued that if independent entities are allowed to set up private captive networks with direct 5G spectrum allocation, “the business case of TSPs (Telecom Service Providers) will be severely degraded.”