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Indian regulator mulling another spectrum sale

Indian regulator mulling another spectrum sale

The government of India has announced plans to invite bids for 3,000MHz of spectrum across nine frequency bands, in what would be the country’s largest ever auction.

Regulator TRAI (Telecom Regulatory Authority of India) has been requested by the Indian telecoms ministry to provide suggested reserve prices for spectrum in the 700MHz, 800MHz, 900MHz, 1.8GHz, 2.1GHz, 2.3GHz, 2.5GHz, 3.3GHz to 3.4GHz, and 3.4GHz to 3.6GHz bands.

No date has been confirmed for the auction, but if it goes ahead it will mark the first time that spectrum above 3GHz has been made available for bidding. However, there is significant resistance to another auction from the country’s heavily indebted operators, who are calling for a delay until at least the current spate of consolidation is complete.

COAI (Cellular Operators Association of India) director general Rajan Mathews said that the Indian authorities “must not rush into any spectrum auction this year”, arguing that a sale should take place “only once all consolidation has been announced and locked down.”

Last year, TRAI issued a consultation paper regarding the auction of spectrum across seven bands, prompting some of India’s largest operators – including Bharti Airtel and Idea Cellular – to push back, claiming that increasing debt levels and spiralling revenues meant that the market was not ready for another auction.

The issues affecting the market currently can be traced back to the September 2016 launch of Reliance Jio, which shook up the mobile space by offering free or heavily discounted services, forcing rivals to lower their prices. The incumbent operators have argued that auctions should be pushed back to late 2018 or early 2019. Similarly, there is little appetite for a 5G spectrum auction until a greater ecosystem of compatible devices develops in the market.

This is not the first time that operators have bemoaned the frequency of spectrum auctions in a market that is not ready for them. While India’s last auction brought in $9.8 billion for the government, 60% of the 2,300+ MHz of available frequencies went unsold, with the majority of bidders angling for 1.8GHz and 2.3GHz 4G spectrum in the service areas that would allow them to cover India’s larger cities.

In particular, the highly efficient 700MHz and 900MHz bands attracted no interest as their reserve prices were deemed unreasonably high. The government had anticipated a haul of INR4 trillion ($62.2 billion) from just the 700MHz band; industry watchers have recommended that the government reduce the reserve prices.

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