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TRAI hopes to lure spectrum bidders with lower reserve prices

TRAI hopes to lure spectrum bidders with lower reserve prices

Indian regulator TRAI (Telecom Regulatory Authority of India) has proposed making more than 8,500MHz of spectrum available across nine bands when the country holds its next spectrum auctions.

If this amount of spectrum is released for an auction, and all lots were sold for at least their reserve prices, a fresh sale could bring in up to INR5 trillion ($73 billion), according to the Economic Times. The regulator has not yet recommended a date for a future auction.

India has recently revised its spectrum caps to improve competition. Operators can hold a maximum of 35% in one band and a combined 50% in bands below 1GHz, and TRAI has recommended that this limit should apply to the 3.65GHZ band. The regulator also proposed selling 5G spectrum in 20MHz blocks at a price of INR4.92 billion per MHz, with a 100MHz cap on holdings in the band.

At the country’s last auction in October 2016, high reserve prices were blamed when 60% of the available spectrum was left unsold. In response TRAI has cut reserve prices dramatically, with the 700MHz band slashed by 43% to INR65.7 billion per MHz – in the last auction, there were no bids for spectrum in this band. Despite the price drop, the base prices for 700MHz and 5G spectrum are still considered high by global standards, with analysts predicting little interest in these bands.

The Department of Telecommunications will need to clear TRAI’s proposals before they can be approved by the cabinet.

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